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Prepared Witness Testimony
The Committee on Energy and Commerce
W.J. "Billy" Tauzin, Chairman

Information Privacy: Industry Best Practices and Technological Solutions
Subcommittee on Commerce, Trade, and Consumer Protection
June 21, 2001
10:00 AM
2123 Rayburn House Office Building


Mr. Stephen Hsu
Cofounder, Chairman and CEO
SafeWeb, Inc.
520 Third Street, Suite 204
Oakland, CA, 94607


Mr. Chairman and  members of the Subcommittee: Thank you for this opportunity to share my views on this important subject. SafeWeb develops Internet privacy and security technologies for businesses and consumers. Our core consumer product, www.safeweb.com, lets Internet users surf the Web anonymously so that no one can pry into their online communications.

SafeWeb's technology lets users access the entire Web through a layer of encryption. All of the information coming in and out of their computers is fully encrypted, and dangerous code such as cookies and Web bugs is filtered. Our servers communicate directly with the SSL (Secure Socket Layer) engine present in every browser so that no software download or installation is necessary.

Because our solution is free, effective and easy to use, it has quickly grown to become the most widely used online privacy service in the world. We currently secure over 100 million Web pages each month through www.safeweb.com. We are also licensing this technology to businesses and governmental agencies that place the utmost importance on security and require the strongest technology available to meet their stringent requirements.

Before discussing the topic of privacy, let's begin with a broad view of what is happening in information technology. You may be familiar with Moore's Law, originally formulated by Gordon Moore, one of the co-founders of Intel. Moore observed that the computing power of microchips doubles roughly every 1.5 years. It is no surprise that today's laptop is far superior to the supercomputer of 10 years ago. A similar trend is  occurring in the areas of data storage and data transmission: the cost of storing data is cut in half each year and the capacity to transmit data is doubling each year. With these factors in play, the end result is exponential growth in our ability to store, transmit and analyze information.

What does this mean for privacy? It means that technology will inevitably make it easier for governments and corporations to invade the privacy of individual citizens. Consider the following example. Currently, someone with access to my credit card records could gain a fairly accurate picture of my eating, shopping and leisure habits. Perhaps two-thirds of all of my personal purchases are made on this credit card. Imagine the situation five years from now, when digital cash and smart cards are ubiquitous and nearly 100 percent of all purchases are executed digitally. Eventually, databases will be able to record not just how much money I spend, but exactly what I purchased, as well as where and when  I made this purchase. This will apply to purchases of entertainment  and food, as well as other items. It will not be long before databases will be capable of recording all of the phone and e-mail traffic of ordinary individuals - not just basic data (e.g., identities of sender/caller/recipient, time and length of communication), but  the actual content of the communications.

Why would someone be motivated to assemble such data? The answer is simple. Most businesses, from banks to shoe stores, spend significant amounts of money on customer acquisition. As businesses, they are highly motivated to make this process as efficient and economical as possible, and technology can oblige in astounding ways. Government and law enforcement have different, but equally strong, motivations to know more about what people are doing.

Is this a bad thing?  Not necessarily. It would be foolish not to acknowledge the advantages this future will bring both to individuals as well as to corporations and governments. However, it is easy to see that  these massive databases, once created, will be subject to myriad forms of abuse. Survey after survey indicates that the overwhelming majority of Americans is already concerned about their online privacy and desire greater protections when they surf the Web. According to one recent survey, Americans are more concerned about loss of privacy than health care, crime, or taxes.[1]

On a global level, the need for online privacy and freedom of speech is even more urgent. Despite different countries' differing laws, we at SafeWeb believe that the right to privacy and the right of free speech are not just rights granted to American citizens by the United States Constitution; these are human rights that every country, democratic or not, ought to accord their citizens. Approximately 327 million people worldwide use the Internet today, and an estimated 502 million people will be online by 2003.

As the number of Internet users steadily grows, we can expect privacy concerns to escalate and grow increasingly volatile. The general public has only just begun to realize the extent of the privacy problem, and has only just begun to explore the possible privacy solutions.

While it would be convenient to claim that technology alone can solve these problems, to do so would be to pronounce a fallacy. There are several companies like SafeWeb that create technologies to help consumers protect their online privacy. However, these technological tools tend to be used by sophisticated, technologically savvy people, and less so by the average Internet user. According to one survey, only nine percent of online users have used encryption to scramble their e-mail, and a mere five percent have taken advantage of anonymous Web browsing services.[2]  Americans should not have to become experts on cookies, Web bugs  or relational databases in order to preserve their privacy.

 It is my opinion that the protection of consumer privacy requires both legal and technological action. I hope that legislators will recognize the current trends and pass laws that will protect the rights of individuals in this burgeoning information age.

Thank you.



[1]  Harris Interactive survey (National Consumers League), October 2000

[2]   The Pew Internet & American Life Report; Trust and privacy online: Why Americans want to rewrite the rules (August 2000)


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