Leibowitz: COPPA Update Tracks With Markey Kids Bill

House E&C continues to vet online privacy issues
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Federal Trade Commission Chairman Jon Leibowitz signaled Thursday that the FTC's update of the Children's Online Privacy Protection Act (COPPA) would track with a kids "do-not-track" bill championed by COPPA's author, Rep. Ed Markey (D-Mass.).

He did not say how closely, but the Markey bill, co-sponsored by Joe Barton (R-Texas), would require parental permission for collecting data on kids, defined as 15 and under.

Leibowitz and National Telecommunications & Information Administration chief Larry Strickling were on Capitol Hill Thursday to testify at a House Energy & Commerce Manufacturing and Trade Subcommittee hearing on privacy,  "Balancing Privacy and Innovation: Does the President's Proposal Tip the Scale?"

Markey pressed Strickling, the Obama administration's chief telecom policy adviser, to support his bill saying there should be no debate about protecting kids online, then became angered when Strickling would only say he would work with Markey and that the administration-backed industry code of conduct on do not track included promoting protections for kids. Markey said he thought the administration should support, not just consider, enshrining further kids online protections in statue. "I just think you are wrong. There should be a law," he said.

Both the FTC and Commerce have recently endorsed a self-regulatory privacy bill of rights and browser-based do-not-track mechanism for data collection and targeted advertising. While both the FTC and Commerce, of which NTIA is a part, emphasized industry rather than government action, the FTC has pledged to use its enforcement power over false and deceptive advertising to police those industry actions, and both FTC and Commerce recommend some baseline privacy legislation.

Subcommittee Chair Mary Bono Mack (R-Calif.) said she was not sure legislation was necessary, but that she also did not think industry was doing enough and that she was suspicious of the motives of both industry and government in the debate. AS she has said before, the challenge is finding the "sweet spot" that protects privacy while not discouraging innovation or harming the Internet economy.

She said the government has a bad habit of overreaching when it comes to new regulations. Rep. Fred Upton (R-Mich.), chair of the House Energy & Commerce Committee, seconded Bono Mack's concern. He said he was "highly skeptical" of the ability of Congress or regulators to keep up with the pace of change online without doing damage to the Internet by attempting to wrap it in red tape. He said consumer choice was a strong incentive for businesses to protect privacy.

Ranking member Rep. G.K. Butterfield (D-N.C.) spoke up for legislation. He said that a privacy bill of rights needed the backstop of legislation since it is not otherwise legally enforceable. He said a flexible, comprehensive bill would give industry certainty, a point Leibowitz and Strickling both made.

Their argument, and Leibowitz, who said a tech CEO had made the point to him recently, was that it was better for the 90% of good actors who have pledged to adopt do not track regimes and a privacy bill of rights would benefit from making sure the other 10% are held to the same standard, otherwise the bad actors could get a competitive advantage. While the FTC has authority to take enforcement action against those who promise to adhere to industry codes of conduct and don't under unfair and deceptive practices, without help from Congress, it cannot pursue bad actors for violating promises they never made.

A second panel of witnesses from the online advertising, and publishing and mobile app industries cautioned against trying to legislate the government's codes of conduct or privacy bill of rights that have been proposed.

Bono Mack said she was concerned that bill of rights would morph into Big Government rules of the road complete with red light cameras. Strickling seemed to suggest that was the administration's plan, saying that his idea of baseline privacy legislation would be codifying that bill of rights.

Jonathan Zuck, president of the Association for Competitive Technology, had the hearing's most quotable line. NTIA, which will be moderating stakeholder discussions about privacy best practices, has suggested that mobile apps might be first on the list of issues. Zuck warned against spotlighting any distribution system and suggested the approach needed instead to focus on data as it applied to everyone. The only way for the multi-stakeholder model to work is if everyone has a stake in the outcome, he said. Spotlighting mobile apps, he suggested, will make them feel like they are the "steak," and everyone is carrying around a bottle of A1 steak sauce.

While the privacy issue crosses party lines -- the Markey and Barton teaming for example -- in general Republicans expressed reservations about the government trying to regulate or legislate in a fast-moving digital space, while Democrats expressed reservations about the industry's ability to self-enforce its conduct absent the backstop of legislation.

That continues to be the biggest obstacle to a bipartisan privacy bill. "There are no easy answers or quick fixes," said Bono Mack in closing the hearing.

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