S. HRG. 111–1038 CONSUMER ONLINE PRIVACY HEARING BEFORE THE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION UNITED STATES SENATE ONE HUNDRED ELEVENTH CONGRESS SECOND SESSION JULY 27, 2010 Printed for the use of the Committee on Commerce, Science, and Transportation ( U.S. GOVERNMENT PRINTING OFFICE 67–686 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 13:52 Aug 03, 2011 Jkt 067686 PO 00000 Frm 00001 Fmt 5011 Sfmt 5011 S:\GPO\DOCS\67686.TXT SCOM1 PsN: JACKIE SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION ONE HUNDRED ELEVENTH CONGRESS SECOND 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 BYRON L. DORGAN, North Dakota JOHN ENSIGN, Nevada 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 GEORGE S. LEMIEUX, Florida MARK PRYOR, Arkansas JOHNNY ISAKSON, Georgia CLAIRE MCCASKILL, Missouri DAVID VITTER, Louisiana AMY KLOBUCHAR, Minnesota SAM BROWNBACK, Kansas TOM UDALL, New Mexico MIKE JOHANNS, Nebraska MARK WARNER, Virginia MARK BEGICH, Alaska ELLEN L. DONESKI, Staff Director JAMES REID, Deputy Staff Director BRUCE H. ANDREWS, General Counsel ANN BEGEMAN, Republican Staff Director BRIAN M. HENDRICKS, Republican General Counsel NICK ROSSI, Republican Chief Counsel (II) VerDate Nov 24 2008 13:52 Aug 03, 2011 Jkt 067686 PO 00000 Frm 00002 Fmt 5904 Sfmt 5904 S:\GPO\DOCS\67686.TXT SCOM1 PsN: JACKIE C O N T E N T S Page Hearing held on July 27, 2010 ............................................................................... 1 Statement of Senator Rockefeller ........................................................................... 1 Statement of Senator Johanns ............................................................................... 3 Statement of Senator LeMieux ............................................................................... 22 Statement of Senator Thune ................................................................................... 24 Statement of Senator Dorgan ................................................................................. 26 Statement of Senator Kerry .................................................................................... 87 Statement of Senator McCaskill ............................................................................. 90 Statement of Senator Klobuchar ............................................................................ 92 Statement of Senator Begich .................................................................................. 94 WITNESSES Hon. Julius Genachowski, Chairman, Federal Communications Commission ... 3 Prepared statement .......................................................................................... 5 Hon. Jonathan D. Leibowitz, Chairman, Federal Trade Commission ................ 6 Prepared statement .......................................................................................... 8 Dr. Guy ‘‘Bud’’ Tribble, Vice President, Software Technology, Apple Inc. .......... 35 Prepared statement .......................................................................................... 37 Bret Taylor, Chief Technology Officer, Facebook .................................................. 44 Prepared statement .......................................................................................... 46 Dr. Alma Whitten, Privacy Engineering Lead, Google Inc. ................................. 53 Prepared statement .......................................................................................... 54 Jim Harper, Director of Information Policy Studies, The Cato Institute ........... 63 Prepared statement .......................................................................................... 65 Dorothy Attwood, Senior Vice President, Public Policy and Chief Privacy Officer, AT&T Inc. ................................................................................................ 77 Prepared statement .......................................................................................... 79 Joseph Turow, Ph.D., Robert Lewis Shayon Professor of Communication, The Annenberg School for Communication, University of Pennsylvania ............... 82 Prepared statement .......................................................................................... 84 APPENDIX Laura W. Murphy, Director, Washington Legislative Office and Christopher Calabrese, Legislative Counsel, American Civil Liberties Union, prepared statement .............................................................................................................. 111 Response to written questions submitted by Hon. John F. Kerry to: Hon. Jon Leibowitz ........................................................................................... 116 Guy ‘‘Bud’’ Tribble ............................................................................................ 117 Response to written questions submitted to Bret Taylor by: Hon. John D. Rockefeller IV ............................................................................ 118 Hon. John F. Kerry .......................................................................................... 120 Response to written questions submitted by Hon. John F. Kerry to: Dr. Alma Whitten ............................................................................................. 120 Professor Joseph Turow ................................................................................... 122 (III) VerDate Nov 24 2008 13:52 Aug 03, 2011 Jkt 067686 PO 00000 Frm 00003 Fmt 5904 Sfmt 5904 S:\GPO\DOCS\67686.TXT SCOM1 PsN: JACKIE VerDate Nov 24 2008 13:52 Aug 03, 2011 Jkt 067686 PO 00000 Frm 00004 Fmt 5904 Sfmt 5904 S:\GPO\DOCS\67686.TXT SCOM1 PsN: JACKIE CONSUMER ONLINE PRIVACY TUESDAY, JULY 27, 2010 U.S. SENATE, COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION, Washington, DC. The Committee met, pursuant to notice, at 2:36 p.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. This hearing will come to order. And I should warn our participants here that we have, I believe, a vote at 3 o’clock; originally, it was at 2:45, so we have 15 minutes of grace, some of which will be taken up by my opening statement, for which I apologize, but which I am going to enormously enjoy giving. So, thank you very much for being here. And others are try- ing to juggle stuff, but they will all be here. Today, our committee is going to examine the issue of consumer privacy in an online world. Mark Pryor had a subcommittee hear- ing on this subject, with respect to children. But, this is actually the first time, I think, in committee’s history, that we have had precisely this kind of, writ large, online privacy hearing. So, it’s very important to me. It’s an issue I am deeply interested in, and I know my colleagues, especially Senators Kerry and Pryor, who chair the Subcommittees on Communications Consumer Protection, are, also. I thank them for their work on this issue. Imagine this scenario: You’re in a shopping mall. And while you’re there, there’s a machine recording every store you enter and every product that you look at and every product that you buy. You go into a bookstore, the machine records every book you purchase and every book you peruse. Then you go to a drugstore. The ma- chine is watching you there, meticulously recording every product you pick up, from the shampoo and the allergy medicine to your personal prescription, if you are searching for one. The machine records your every move that day—every single move. Then, based on what you look at, where you shop, what you buy, it builds a personality profile on you. It predicts what you may want in the future and starts sending you coupons. Further, it tells businesses what a good potential client you may be and shares your personality profile with them. Do they have your permission for doing that? Of course not. Is it possible that they give you some alternatives, in fine print, which nobody has the time or the inter- (1) VerDate Nov 24 2008 13:52 Aug 03, 2011 Jkt 067686 PO 00000 Frm 00005 Fmt 6633 Sfmt 6633 S:\GPO\DOCS\67686.TXT SCOM1 PsN: JACKIE 2 est or the eyesight to read? They might, but that doesn’t count, if we’re doing this straight up. So, this sounds fantastic, something like out of a science fiction. But, this fantastic scenario is essentially what happens every sec- ond of every day to anyone who uses the Internet. Every time you go online, a computer server tracks the websites that you visit. When you send or receive an e-mail, a computer may scan the con- tents of that e-mail. And when you use a mobile device, a computer often tracks your location—very interesting—your location, where you are. Moreover, these computers—computer servers, these ma- chines, as I call them, are storing all of this information about you and using it to build your personality profile, which, as it happens, they share with others. And thus, we enter the briar patch. From this profile, they determine your personal tastes and private char- acteristics.