TOPICS > Politics

Background: Regulating Internet Privacy

June 11, 1997 at 12:00 AM EDT
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KWAME HOLMAN: Computers have changed the lives of millions of Americans. More people work at home–children e-mail their grandparents–busy parents do their shopping via the Internet, and businesses rely on computers to store and retrieve huge amounts of information. But what many Internet users don’t know is that many of their transactions leave an electronic trail of information about them, sometimes even imprinting the user’s own computer without his or her knowledge. And the information, some of it public, some not, is being bought and sold by advertisers, retailers, and others. The practices have caused an uproar among consumers.

A Louis Harris study released today showed that 53 percent of Internet users worry that information about their online use will be disclosed without their permission, though only a small number–5 percent–said they felt their privacy has been violated. But nearly 80 percent said they’d declined to give information about themselves online on at least one occasion after such information was solicited. And more than half of the Internet users surveyed–58 percent–said the situation is serious enough to warrant laws regulating the collection and use of information on the Internet. Alan Westin of Columbia University helped conduct the survey and released the findings at a Federal Trade Commission hearing today.

ALAN WESTIN, Columbia University: I think that the survey is quite clear in saying that online users want some privacy, law, and order on the cyber frontier; that the day of the cattlemen and the hacker gunmen, and the sheep herders, and all of the business of the frontier needs a little schoolmarm, minister, sheriff, and judge in order to achieve balance that people want to see in this exciting new environment.

KWAME HOLMAN: All kinds of personal information is available online, including public records such as birth and death dates; marriage and divorce records; property transactions, as well as motor vehicle and drivers’ license information. Other information comes from private sources, such as insurance companies and credit reporting agencies. That includes Social Security numbers, health care records, and insurance claims, credit card accounts, and information about buying habits. Such online data is sold in much the same way magazine publishers sell lists of their subscribers. America Online, the nation’s largest Internet provider, sells its membership list.

Other database companies also cull and sell such information. Last year, Lexis-Nexis launched a service aimed at lawyers and law enforcement agencies seeking to track down potential witnesses or suspects. It displays portions of credit reports–deleting confidential financial data but giving names, addresses, and other basic information. The company also sold information that included Social Security numbers, but after being deluged with complaints terminated the service 10 days after start-up. And Lexis-Nexis has made other changes: The company now requires those who request the credit report service to purchase special software to access the system. Lexis-Nexis also now bars access to information about those who ask that their names be taken out of the system.

And, ironically, even the Social Security administration, itself, came under fire two months ago when its Web site offered consumers access to their own benefits and earnings records. Complaints that the site wasn’t secure caused the agency to shut down the service temporarily. Computer users can get some privacy by using special software that safeguards information about themselves while browsing the World Wide Web. Congress also is working to address privacy concerns, but the computer information services industry hopes to head off government regulation by placing voluntary limits on itself.

Today two Internet software giants and rivals–Microsoft and Netscape–announced they’re working together to create software to help safeguard personal information online. And earlier this week, at the Federal Trade Commission hearing a coalition of eight major database companies, including Lexis Nexis, proposed voluntary limits on access to certain kinds of information, including Social Security numbers. Industry representatives talked about such measures at today’s hearing.

H. ROBERT WIENTZEN, The Direct Marketing Association: Effective self-regulation to date has enabled direct marketing to become a $1.1 trillion business. Given the chance, we believe that self-regulation will enable online commerce to reach its full potential as well.

KWAME HOLMAN: The Federal Trade Commission hearings continue through Friday. The Commission’s findings will comprise a report to Congress on database privacy by the end of the year.