S. HRG. 106–1116 TO REVIEW THE FEDERAL TRADE COMMISSION’S SURVEY OF PRIVACY POLICIES POSTED BY COMMERCIAL WEB SITES HEARING BEFORE THE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION UNITED STATES SENATE ONE HUNDRED SIXTH CONGRESS SECOND SESSION MAY 25, 2000 Printed for the use of the Committee on Commerce, Science, and Transportation ( U.S. GOVERNMENT PRINTING OFFICE 81–862 PDF WASHINGTON : 2003 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) 512–2250 Mail: Stop SSOP, Washington, DC 20402–0001 VerDate 0ct 09 2002 10:16 Dec 30, 2003 Jkt 081862 PO 00000 Frm 00001 Fmt 5011 Sfmt 5011 S:\WPSHR\GPO\DOCS\81862.TXT JACK PsN: JACKF SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION ONE HUNDRED SIXTH CONGRESS SECOND SESSION JOHN MCCAIN, Arizona, Chairman TED STEVENS, Alaska ERNEST F. HOLLINGS, South Carolina CONRAD BURNS, Montana DANIEL K. INOUYE, Hawaii SLADE GORTON, Washington JOHN D. ROCKEFELLER IV, West Virginia TRENT LOTT, Mississippi JOHN F. KERRY, Massachusetts KAY BAILEY HUTCHISON, Texas JOHN B. BREAUX, Louisiana OLYMPIA J. SNOWE, Maine RICHARD H. BRYAN, Nevada JOHN ASHCROFT, Missouri BYRON L. DORGAN, North Dakota BILL FRIST, Tennessee RON WYDEN, Oregon SPENCER ABRAHAM, Michigan MAX CLELAND, Georgia SAM BROWNBACK, Kansas MARK BUSE, Republican Staff Director MARTHA P. ALLBRIGHT, Republican General Counsel KEVIN D. KAYES, Democratic Staff Director MOSES BOYD, Democratic Chief Counsel (II) VerDate 0ct 09 2002 10:16 Dec 30, 2003 Jkt 081862 PO 00000 Frm 00002 Fmt 5904 Sfmt 5904 S:\WPSHR\GPO\DOCS\81862.TXT JACK PsN: JACKF C O N T E N T S Page Hearing held on May 25, 2000 ............................................................................... 1 Statement of Senator Ashcroft ............................................................................... 8 Statement of Senator Bryan ................................................................................... 7 Statement of Senator Burns ................................................................................... 6 Statement of Senator Cleland ................................................................................. 13 Statement of Senator Gorton .................................................................................. 12 Statement of Senator Hollings ............................................................................... 2 Prepared statement .......................................................................................... 3 Statement of Senator Kerry .................................................................................... 10 Statement of Senator McCain ................................................................................. 1 Statement of Senator Rockefeller ........................................................................... 12 Statement of Senator Stevens ................................................................................ 4 Statement of Senator Wyden .................................................................................. 4 Prepared statement .......................................................................................... 5 WITNESSES Anthony, Hon. Sheila F., Commissioner, Federal Trade Commission ................ 23 Prepared statement .......................................................................................... 25 Berman, Jerry, Executive Director, Center for Democracy and Technology ...... 68 Prepared statement .......................................................................................... 70 Catlett, Jason, President and Chief Executive Officer, Junkbusters Corpora- tion, and Visiting Scholar, Columbia University Department of Computer Science ................................................................................................................... 63 Prepared statement .......................................................................................... 65 Leary, Hon. Thomas B., Commissioner, Federal Trade Commission .................. 35 Prepared statement .......................................................................................... 36 Lesser, Jill A., Vice President of Domestic Public Policy, America Online, Inc. ......................................................................................................................... 53 Prepared statement .......................................................................................... 56 Pitofsky, Hon. Robert, Chairman, Federal Trade Commission ............................ 15 Prepared statement .......................................................................................... 17 Swindle, Hon. Orson, Commissioner, Federal Trade Commission ...................... 28 Prepared statement .......................................................................................... 30 Thompson, Hon. Mozelle W., Commissioner, Federal Trade Commission .......... 32 Prepared statement .......................................................................................... 33 Varney, Christine, Senior Partner, Hogan and Hartson, on behalf of the Online Privacy Alliance ....................................................................................... 60 Prepared statement .......................................................................................... 62 Weitzner, Daniel J., Technology and Society Domain Leader, World Wide Web Consortium ................................................................................................... 77 Prepared statement .......................................................................................... 79 APPENDIX Berman, Jerry, Executive Director, Center for Democracy and Technology, letter dated September 8, 2000, to Hon. John McCain ..................................... 97 Jaffe, Daniel L., Executive Vice President, Association of National Adver- tisers, Inc., letter dated June 12, 2000, to Hon. John McCain ......................... 98 (III) VerDate 0ct 09 2002 10:16 Dec 30, 2003 Jkt 081862 PO 00000 Frm 00003 Fmt 5904 Sfmt 5904 S:\WPSHR\GPO\DOCS\81862.TXT JACK PsN: JACKF IV Page Response to written questions submitted by Hon. Max Cleland to: Jason Catlett ..................................................................................................... 91 Federal Trade Commission .............................................................................. 93 Jill A. Lesser ..................................................................................................... 92 Orson Swindle ................................................................................................... 94 Torricelli, Hon. Robert G., U.S. Senator from New Jersey, prepared state- ment ...................................................................................................................... 99 VerDate 0ct 09 2002 10:16 Dec 30, 2003 Jkt 081862 PO 00000 Frm 00004 Fmt 5904 Sfmt 5904 S:\WPSHR\GPO\DOCS\81862.TXT JACK PsN: JACKF TO REVIEW THE FEDERAL TRADE COMMISSION’S SURVEY OF PRIVACY POLICIES POSTED BY COMMERCIAL WEB SITES THURSDAY, MAY 25, 2000 U.S. SENATE, COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION, Washington, DC. The Committee met, pursuant to notice, at 9:30 a.m. in room SR– 253, Russell Senate Office Building, Hon. John McCain, Chairman of the Committee, presiding. OPENING STATEMENT OF HON. JOHN MCCAIN, U.S. SENATOR FROM ARIZONA The CHAIRMAN. Good morning. This morning the Committee will examine the recently released FTC report on online privacy. I wel- come the members of the Commission and all the witnesses we will hear from today to the Committee. I also want to thank all of you for the hard work and dedication you have brought to this difficult issue. Every accolade that can be ascribed to the Internet has been stated many times over. Needless to say, it continues to transform our lives and our economy. While the Internet promises great op- portunities, it also presents new concerns and fears. Chief among those concerns is the ability of the Internet to further erode indi- vidual privacy. Since the beginning of commerce, business has sought to learn more about consumers. The ability of the Internet to aid business in the collection, storage, and transfer of information about con- sumers, however, is unprecedented. While this technology can allow business to better target goods and services, it has also increased consumers’ fears about the col- lection and use of personally identifiable information. The Commis- sion documented many of these concerns in its report. Last year when the Committee reviewed the FTC’s 1999 report on privacy, I made clear that my primary concern was to ensure that privacy policies were clear and understandable, that con- sumers could use them to guide their decisions, and that companies actually followed the policies they posted. Improving the depth of privacy policies is the primary factor motivating this Committee’s interest in this matter. This year’s report demonstrates that the business community has had great success in providing consumers with some form of notice (1) VerDate 0ct 09 2002 10:16 Dec 30, 2003 Jkt 081862 PO 00000 Frm 00005 Fmt 6633 Sfmt 6633 S:\WPSHR\GPO\DOCS\81862.TXT JACK PsN: JACKF 2 of their information practices. However, the report makes it equally clear there is much work to be done to improve the depth of infor- mation practices on the Internet. Consumers should not be forced to forego what has