S. HRG. 112–152 PRIVACY AND DATA SECURITY: PROTECTING CONSUMERS IN THE MODERN WORLD HEARING BEFORE THE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION UNITED STATES SENATE ONE HUNDRED TWELFTH CONGRESS FIRST SESSION JUNE 29, 2011 Printed for the use of the Committee on Commerce, Science, and Transportation ( U.S. GOVERNMENT PRINTING OFFICE 71–313 PDF WASHINGTON : 2011 For sale by the Superintendent of Documents, U.S. Government Printing Office Internet: bookstore.gpo.gov Phone: toll free (866) 512–1800; DC area (202) 512–1800 Fax: (202) 512–2104 Mail: Stop IDCC, Washington, DC 20402–0001 VerDate Nov 24 2008 06:20 Nov 28, 2011 Jkt 071313 PO 00000 Frm 00001 Fmt 5011 Sfmt 5011 S:\GPO\DOCS\71313.TXT SCOM1 PsN: JACKIE SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION ONE HUNDRED TWELFTH CONGRESS FIRST SESSION JOHN D. ROCKEFELLER IV, West Virginia, Chairman DANIEL K. INOUYE, Hawaii KAY BAILEY HUTCHISON, Texas, Ranking JOHN F. KERRY, Massachusetts OLYMPIA J. SNOWE, Maine BARBARA BOXER, California JIM DEMINT, South Carolina BILL NELSON, Florida JOHN THUNE, South Dakota MARIA CANTWELL, Washington ROGER F. WICKER, Mississippi FRANK R. LAUTENBERG, New Jersey JOHNNY ISAKSON, Georgia MARK PRYOR, Arkansas ROY BLUNT, Missouri CLAIRE MCCASKILL, Missouri JOHN BOOZMAN, Arkansas AMY KLOBUCHAR, Minnesota PATRICK J. TOOMEY, Pennsylvania TOM UDALL, New Mexico MARCO RUBIO, Florida MARK WARNER, Virginia KELLY AYOTTE, New Hampshire MARK BEGICH, Alaska DEAN HELLER, Nevada ELLEN L. DONESKI, Staff Director JAMES REID, Deputy Staff Director BRUCE H. ANDREWS, General Counsel BRIAN M. HENDRICKS, Republican Staff Director and General Counsel TODD BERTOSON, Republican Deputy Staff Director REBECCA SEIDEL, Republic Chief Counsel (II) VerDate Nov 24 2008 06:20 Nov 28, 2011 Jkt 071313 PO 00000 Frm 00002 Fmt 5904 Sfmt 5904 S:\GPO\DOCS\71313.TXT SCOM1 PsN: JACKIE C O N T E N T S Page Hearing held on June 29, 2011 ............................................................................... 1 Statement of Senator Rockefeller ........................................................................... 1 Statement of Senator Kerry .................................................................................... 2 Statement of Senator Toomey ................................................................................. 4 Prepared statement of the National Retail Federation and Shop.org .......... 6 Statement of Senator Wicker .................................................................................. 36 Statement of Senator Ayotte ................................................................................... 36 Statement of Senator Klobuchar ............................................................................ 38 WITNESSES Hon. Julie Brill, Commissioner, Federal Trade Commission ............................... 13 Prepared statement .......................................................................................... 15 Hon. Cameron F. Kerry, General Counsel, U.S. Department of Commerce ....... 23 Prepared statement .......................................................................................... 24 Austin C. Schlick, General Counsel, Federal Communications Commission ..... 29 Prepared statement .......................................................................................... 31 Stuart K. Pratt, President and CEO, Consumer Data Industry Association ..... 40 Prepared statement .......................................................................................... 42 Ioana Rusu, Regulatory Counsel, Consumers Union ............................................ 46 Prepared statement .......................................................................................... 48 Tim Schaaff, President, Sony Network Entertainment International ................ 52 Prepared statement .......................................................................................... 53 Thomas M. Lenard, Ph.D., President and Senior Fellow, Technology Policy Institute ................................................................................................................ 55 Prepared statement .......................................................................................... 56 Scott Taylor, Chief Privacy Officer, Hewlett-Packard Company ......................... 59 Prepared statement .......................................................................................... 60 APPENDIX Letter, dated June 29, 2011, to Hon. John D. Rockefeller IV and Hon. Kay Bailey Hutchison from: American Advertising Federation, American Asso- ciation of Advertising Agencies, Association for Competitive Technology, Consumer Data Industry Association, CTIA—The Wireless Association, Di- rect Marketing Association, Electronic Retailing Association, Interactive Advertising Bureau, National Association of Professional Background Screeners, National Business Coalition on E-Commerce and Privacy, NetChoice, Network Advertising Initiative, Performance Marketing Associa- tion and U.S. Chamber of Commerce ................................................................. 69 Letter, dated June 27, 2011, to Natasha Mbabazi, Senator Thomas Udall, Senator Frank Lautenberg and Senator Barbara Boxer from Lisa Liberi and Lisa Ostella ................................................................................................... 72 Response to written questions submitted to Hon. Julie Brill by: Hon. John D. Rockefeller IV ............................................................................ 73 Hon. Claire McCaskill ...................................................................................... 74 Hon. John F. Kerry .......................................................................................... 74 Hon. Barbara Boxer ......................................................................................... 77 Hon. Mark Begich ............................................................................................. 78 Hon. Kelly Ayotte ............................................................................................. 79 Response to written questions submitted to Hon. Cameron F. Kerry by: Hon. John F. Kerry .......................................................................................... 81 Hon. Mark Begich ............................................................................................. 83 (III) VerDate Nov 24 2008 06:20 Nov 28, 2011 Jkt 071313 PO 00000 Frm 00003 Fmt 5904 Sfmt 5904 S:\GPO\DOCS\71313.TXT SCOM1 PsN: JACKIE IV Page Response to written question submitted to Austin C. Schlick by: Hon. Claire McCaskill ...................................................................................... 84 Hon. Mark Begich ............................................................................................. 84 Response to written questions submitted to Stuart K. Pratt by: Hon. John D. Rockefeller IV ............................................................................ 85 Hon. Roger F. Wicker ....................................................................................... 87 Response to written question submitted to Ioana Rusu by: Hon. John D. Rockefeller IV ............................................................................ 87 Hon. Barbara Boxer ......................................................................................... 89 Response to written questions submitted to Tim Schaaff by: Hon. Claire McCaskill ...................................................................................... 90 Response to written questions submitted to Thomas M. Lenard, Ph.D. by: Hon. Roger F. Wicker ....................................................................................... 91 VerDate Nov 24 2008 06:20 Nov 28, 2011 Jkt 071313 PO 00000 Frm 00004 Fmt 5904 Sfmt 5904 S:\GPO\DOCS\71313.TXT SCOM1 PsN: JACKIE PRIVACY AND DATA SECURITY: PROTECTING CONSUMERS IN THE MODERN WORLD WEDNESDAY, JUNE 29, 2011 U.S. SENATE, COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION, Washington, DC. The Committee met, pursuant to notice, at 10 a.m. in room SR– 253, Russell Senate Office Building, Hon. John D. Rockefeller IV, Chairman of the Committee, presiding. OPENING STATEMENT OF HON. JOHN D. ROCKEFELLER IV, U.S. SENATOR FROM WEST VIRGINIA The CHAIRMAN. We’ve got to begin. This hearing will come to order. This is the third hearing on consumer privacy that we’ve had in this committee in the 112th Congress. As I have repeatedly em- phasized, Americans are often unaware of the vast amounts of in- formation that are being collected on them and then used usually to their detriment. I’ve focused on the need for companies to provide everyday con- sumers with a clear understanding of what information they are collecting, where the information is going, and how it’s being used. I’ve also asked companies to give consumers an easy way for them to stop those collection processes. I don’t think this is too much to ask of companies that are making a lot of money and a lot of money that comes off of consumers’ personal information. That should not be happening in America. This is a new cost of doing business in America, and people have to understand that. Government doesn’t subsidize what companies need to be doing to protect privacy. Poll after poll shows that Americans are increasingly concerned about their loss of privacy, and these same polls show that Ameri- cans don’t know what to do about it. I’ve had endless meetings in my state, as I’m sure Senator Kerry and Senator Toomey have, also.