Prepared Statement of The Honorable Cliff Stearns

Privacy in the Commercial World II

Subcommittee on Commerce, Trade, and Consumer Protection
June 20, 2006

Good afternoon. The Commerce, Trade and Consumer Protection Subcommittee first began to work on comprehensive consumer privacy issues back in 2001, when we had a series of hearings on all facets of the issue, including commercial privacy policy, government privacy practices, and related consumer protection issues. In fact, our first hearing, aptly titled "Privacy in the Commercial World" was held over five years ago. Today's installment of that series, "Part Two", has been a long time in coming, but the time is right to revisit comprehensive privacy after spending over five years on several its elements, including legislative work on spyware, pre-texting, and, most recently, data security legislation, which I hope will be brought up for a House vote soon. The five years since that first privacy hearing back in 2001 also has been a period marked by the September 11th attacks, which not only unleashed the military might of the United States but also its ingenuity in using advanced technology, information collection, and sophisticated analysis as one of the major weapons countering the forces of terrorism and totalitarianism around the world. And while certain things have changed since that first hearing, a great deal remains the same. The United States continues to regulate privacy under a sector-specific, disjointed approach -- managing an ever-increasing number of local, state, and federal requirements dealing with notice, consent, and security protections in the health, on-line, financial, and other contexts. Although this collection of laws has increased our protections against privacy infringing practices and to a lesser degree identity theft, this body of law still contains gaping holes and major inconsistencies that leave consumers unprotected and business with uncertainties that directly affect their success.

My hope when I first introduced my bill, HR 1263, the "Consumer Privacy Act of 2005" was to start the process of developing a consistent, federal approach to privacy. Back then, the Committee was focused on constructing an approach to privacy that could become an overlay on all the work that has been done in the area of commercial privacy. The approach would offer better uniformity and more efficient regulation as information technology, the use of consumer information, and domestic and international commerce continue to become more integrated, and in some cases, converge. More uniform, stronger, and more consistent consumer protection was and still remains the goal. Accordingly, the Committee today would like to re-energize this effort with those principles and objectives in mind. The Subcommittee plans to continue its long-term examination of privacy issues with additional hearings, and will begin to work through a draft bill.

As I have said, a fundamental principle and one of the main drivers of our efforts in the area of privacy is to establish a uniform and consistent privacy regime for the American consumer and business. In addition, we need to empower consumers, business, and the federal government to make the application and enforcement of privacy practices in the United States the world benchmark. With regard to data protection, we will examine how our work in data security can complement and enhance a national privacy regime. Further, I believe the Congress needs to take a closer look at how international regulation of privacy, both and the national and supranational level, is affecting U.S. business and its ability to compete globally. We continue to be concerned about the privacy practices of other countries compromising the business decisions of our some of our most successful and innovative companies.

The outcome we are seeking from our efforts in this area is the assurance that the consumer has the knowledge and the control to make informed decisions that involve personal information, and that business has a consistent framework of law and regulation that stimulates innovation and success, rather than hampering those goals. New technologies continue to allow better, more efficient decisions and transactions in the commercial world. We need to encourage that innovation because it is what enables U.S. business to lead the rest of the world. That is a leadership edge that we cannot compromise. We do, however, need to recognize that as information technology and information sharing become more powerful the ability to harm becomes just as powerful and, as we have seen, destructive. Identity theft remains a top concern for this Committee and American consumers. Therefore, rigorous data security and data security policies are essential if we are to protect the progress that we are making in this area.

In closing, this Subcommittee has established, without question, the most comprehensive record on privacy and information security issues in the Congress. This is a foundation that has been built over years of studying these issues and working through some very good ideas in a number of legislative proposals. It is time to continue that important task. To reinitiate our work in the privacy area, I am particularly happy to have several leaders in commercial privacy from business and academia before us today, including Meg Whitman, President and CEO of eBay. Thank you all for joining us and offering your views today. I look forward to continuing this important work, and engaging all stakeholders --consumer groups, business, government, and academia to craft sound, proactive, and necessary legislation in the field of consumer privacy -- legislation that will spur innovation, protect consumers, and ensure that American business will continue to lead the world with it's innovation, productivity, and regard for the privacy of all the consumers it serves.

Thank you.

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