GOP Memo Reveals Privacy Law Sausage-Making Ingredients

Several introductory statements given by Republican members two House Energy and Commerce Subcommittees yesterday stressed the need to ensure that any potential federal privacy legislation is not “overreaching,” or doesn’t create online ad industry winners and losers. Not surprising for typically pro-business Republicans leery of government infringement that can detriment market fairness.

For instance, as I noted in today’s story about the hearing on behavioral advertising, Louisiana’s Steve Scalise suggested “self-regulation is sufficient,” and added, “Congress should not pick winners or losers.”

I thought about his and similar statements when perusing an intriguing memo evidently delivered to GOP Members of those subcommittees from “Republican Committee Staff.” The memo suggests Republicans push for a “consumer-centric” regulatory approach rather than a technology-centric one.

“Rather than taking approaches that focus on particular technologies or particular corporate relationships, we should consider a regime that focuses on consumers. A consumer-centric approach is competitively- and technologically-neutral, because it would apply the same standards to everyone participating in the tailored Internet advertising market, regardless of the technology they use or how they happen to have structured their company. It also places the decision about what information can be collected and/or shared in the consumer’s hands based on his or her preference,” states the memo.

A tech-centric approach would, for instance, outlaw things like deep-packet inspection – the much-maligned ISP-based tracking and targeting method used by companies like NebuAd and Phorm. From the memo: “Focusing on deep packet inspection would also achieve little improvement in consumer privacy because it is barely being used, if at all, in the United States to tailor and deliver online advertising. A deep packet inspection-focused approach would instead only keep phone and cable companies out of the Internet advertising business while online companies continue to expand the market.”

A “consumer-centric” approach would give Web users the ability to decide what information companies can use. How? Uh, that might be just as daunting a task as legislating based on always-evolving technologies.

As the memo states, “Each consumer therefore decides how he or she feels about the information being collected, the parties doing the collecting, and the purpose for which the information will be used…. Additionally, this approach takes the government out of the equation: government does not have to define what information is sensitive and personally identifiable, what uses of the information are allowable, and what technologies are acceptable.”

Those interested in inspecting how our government makes its kielbasa (including sage from the WH garden?) also may have noticed that one of yesterday’s hearing witnesses, Scott Cleland, also concluded in his written testimony, “If Congress decides to legislate on Internet privacy, a consumer-driven, technology/competition neutral privacy framework would be superior to a technology-driven privacy framework.”

Coincidence? Maybe. The similar use of language is of interest, though.

Also interesting is why Cleland was asked to testify at the hearing. He shows up from time to time at these things – usually at hearings related to antitrust issues though. Cleland has long been a thorn in Google’s side. (The company has been known to send the Internet tech industry/government press corps background details on the guy. He’s the president of tech industry research and consulting firm Precursor and has been an outspoken critic of Google. He testified before congress against the firm’s acquisition of DoubleClick. He has also worked as a consultant for Google’s nemesis, Microsoft. He’s gained a reputation as a shill for telcos. I’m not saying he is, but he’s gained that reputation. Remember what the memo said about a deep packet inspection-focused approach keeping phone and cable cos. out of the Internet ad biz? Hmmm….

OK, so, that leads me to wonder whether Google – which wants federal privacy legislation, mainly so there’s only one tangle of red tape to deal with rather than several state-based tangles – is in favor of a tech-based solution. And of course, I want to know if Microsoft is. Unfortunately, the hearing was cut short yesterday and didn’t resume until evening, by which time I was already onto my second or third $7 PBR + whiskey shot at Rodeo Bar. I’ll be listening once the files are posted to the House Energy and Commerce committee site.

Also interesting: Google and Yahoo had reps witnessing at the hearing. MSFT did not. Or did it? Hmmm….

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