Loyola Consumer Law Review Volume 10 | Issue 2 Article 3 1998 Consumers Online: Your Rights to Privacy in Cyberspace Nancy Lazar Follow this and additional works at: http://lawecommons.luc.edu/lclr Part of the Consumer Protection Law Commons Recommended Citation Nancy Lazar Consumers Online: Your Rights to Privacy in Cyberspace, 10 Loy. Consumer L. Rev. 117 (1998). Available at: http://lawecommons.luc.edu/lclr/vol10/iss2/3 This Recent Legislative Activity is brought to you for free and open access by LAW eCommons. It has been accepted for inclusion in Loyola Consumer Law Review by an authorized administrator of LAW eCommons. For more information, please contact [email protected]. RECENT LEGISLATIVE by Nancy Lazar ACTIVITY Consumers Online: Your Right to Privacy in Cyberspace "According to some predictions, applied federal laws safeguarding consumer nearly one billion people will be privacy to commercial transactions in online in the next 10 years. If people cyberspace, the protection of consumer privacy are uncomfortable sending personal online is limited. For instance, although information over the Internet, the Congress amended the Electronic largest potential consumer market Communications Privacy Act of 1986, 18 will be closed to nearly every U.S.C. § 2510 - 2710 (1982 Supp. IV 1986) company in the world," according to ("Act"), to prevent Internet service providers Joseph L. Dionne, chairman and from releasing personal information of their CEO of The McGraw-Hill members to a government agency absent a legal Companies, a leading information request, the Act does not explicitly prohibit services provider. Internet service providers from distributing the members' private information to any individual A Business Week/Louis Harris & Associates or entity outside of government. Furthermore, survey released on March 4, 1998 noted that the Act fails to provide adequate remedies for consumers' concerns about the protection of those whose privacy was violated in their privacy in cyberspace will significantly cyberspace. For instance, the Act does not impede the growth of online electronic include any immediate punishments or commerce in the U.S. The survey found that deterrents for violators of consumer privacy many American consumers believe entering online. In addition, the law fails to establish a personal information into cyberspace poses a mechanism by which private information potential threat to their privacy. Seventy-eight illegally obtained over the Internet can be percent of Americans who use online services excluded from civil or criminal court stated they would use the Internet more if they proceedings. As a result, consumers who use were confident that the Internet system the Internet are not guaranteed true and safeguarded the privacy of their individual complete protection of their right to privacy in information and communications. Similarly, in a cyberspace. The absence of a strict, clear policy recent Georgia Institute of Technology survey on consumer privacy on the Internet and of 10,000 online users, privacy in cyberspace consumer reluctance to participate in online was considered the greatest challenge to the electronic commerce absent privacy protection development of online electronic commerce. has caused the President, Congress, state Since consumer participation in online government, and the information industry itself commercial transactions is a relatively recent to create guidelines on privacy safeguards for phenomenon, the law governing the use of the consumers using the Internet. Internet is obscure. While some courts have 1998 Loyola University Chicago School ofLaw •117 President Clinton Urges Private Industry Requests Limited Aid Industry to Create Internet Privacy from Government in Regulating Safeguards the Internet On July 1, 1997, President Clinton began the In response to President Clinton's surge towards developing online privacy recommendations for the regulation of the guidelines when he approved and issued "A Internet, 11 leading American high-technology Framework for Global Electronic Commerce," companies formed a coalition, the Computer an extensive report describing the role the Systems Policy Project, and issued an 18-page federal government will assume in the evolving position paper on the development of the electronic marketplace. Clinton believes that electronic marketplace on November 18, 1997. "[g]overnment officials should respect the Members of the Policy Project are chief unique nature of the medium and recognize that executive officers of companies including widespread competition and increased Apple Computer Inc., Compaq Computer consumer choice should be the defining Corp., Data General Corp., Digital Equipment features of the new digital marketplace. They Corp., Hewlett-Packard Co., International should adopt a market-oriented approach to Business Machines Corp., NCR Corp., Silicon electronic commerce that facilitates the Graphics Inc., Sun Microsystems Inc., Stratus emergence of a global, transparent,and Computer Inc., and Unisys Corp. To quicken predictable legal environment to support the development of online electronic commerce business and commerce. The report's author, and to gain consumer faith in the electronic Ira Magaziner, the President's senior adviser on marketplace, the coalition urges both Congress Internet policy development, emphasizes and the White House to participate in the throughout the report that the federal creation of electronic commerce policy. government will take a passive role in the However, the coalition requests only limited regulation of electronic commerce. Rather than government involvement. enacting laws to protect the privacy of The coalition makes proposals on consumers online, the federal government controversial Internet issues, such as Internet wants to ensure the implementation of a clear, taxes and consumer privacy on the Internet. strict industry-created system that allows The CEOs propose a "tax neutral" system in consumers to protect themselves. The federal Internet commerce that would not discriminate government urges the information industry to based upon a consumer's method of purchasing set its own policies and procedures if it does a product. To prevent discriminatory and not want the government to play a significant multiple taxation upon Internet users, the role in regulating online commerce. coalition requests that Congress enact legislation that would place a moratorium on new Internet taxes until the information industry and federal and state governments collaboratively create a national standard for imposing Internet taxes. Moreover, the coalition urges the revision of the Uniform 118 * Loyola Consumer Law Review Volume 10, number 2 Recent Legislative Activity Commercial Code so that it would apply entirely absent from participating in Internet specifically to Internet transactions. regulation. Even though he recommended that Mr. Magaziner applauded the CEOs of the the industry itself create its own rules and major high-technology companies for their regulations for safeguarding consumers' immediate response and initiative in developing privacy on the Internet, regulating content, Internet policy. He views the coalition's work creating technical standards, and developing as "a very interesting, useful and helpful electronic payment systems, he believes that the initiative. The principles are consistent with federal government must actively participate in what we're hoping for. And, what's important the regulation of specific Internet policies, is they are stepping up and leading." including taxation, copyright protection, and encryption. Mr. Magaziner explained to industry leaders that "[i]n the Industrial Age, Government Asks Industry to governments passed laws to protect people. In Resolve Internet Privacy Issues at the Digital Age, the role of government will Policy Forum help ensure that regimes come in place in the private sector so people can protect leaders of the On January 8, 1998, themselves." information industry and government officials met to discuss the rapid evolution of Internet commerce at the Internet Policy & Law President Sets Firm Deadline for Forum's 1998 conference in Seattle, Industry to Create Internet Privacy Washington. Mr. Magaziner again urged Policy industry leaders to take immediate initiative in creating various Internet guidelines if they did To prompt information industry leaders into not want the government to play a significant creating their own rules on Internet privacy, role in the regulation of Internet commerce. He President Clinton has set a July 1, 1998 warned that there are currently more than 80 deadline for U.S. Secretary of Commerce bills before Congress concerning the regulation William Daley to submit to the President an of Internet privacy and suggested that if industry-led solution to protect the privacy of industry leaders failed to take quick initiative, consumers who go online. Even if the top the federal government will create more costly executives fail to develop an Internet privacy and less effective Internet policy. Mr. policy by the deadline date, Secretary Daley Magaziner explained to the nearly 150 chief stated that the administration insists upon executive officers of leading electronic industry leaders to at a minimum establish an commerce companies that the "slow-moving independent body of private-sector and bureaucratic" nature of government representatives by the set date. Such a group of prohibits government from keeping up with the industry