Congressional Hearing Fails to Fully Explore the Unintended Consequences for Consumers and Small Businesses
WASHINGTON, July 22 /PRNewswire-USNewswire/ -- The House Committee on Energy and Commerce Subcommittee on Commerce, Trade, and Consumer Protection today explored the BEST PRACTICES Act of 2010, introduced on July 20 by Representative Bobby Rush (D-Ill.). NetChoice has serious concerns over the potential negative impact that enactment of the legislation could have on the entire Internet commerce community.
"Today's hearing confirmed that the legislation is a top-down mandate for regulating the flow of information online," said Steve DelBianco, executive director of NetChoice. "While it is important to develop strong protections for online privacy, the proposed legislation is less about best practices and more about required restrictions."
One element of the proposal calling for a safe harbor "choice program" is no real choice for online businesses, who will be forced to participate to avoid costly lawsuits enabled by the bill's private right of action. As the overseer of the safe harbor program, the Federal Trade Commission will have broad powers to define and approve self-regulatory programs, effectively transforming the FTC into the port authority of the Internet.
Similar to a discussion draft released by Reps. Boucher and Stearns, the bill uses exceptions for legitimate business operations, but these exceptions are much too narrow. For instance, the "Operational Purpose" still would not permit the use of covered information for marketing to existing customers. Additional consent should not be required when a business does follow-up marketing to customers with whom it has already established a business relationship.
The proposal also fails to provide meaningful protection for small businesses. The legislation would not apply to entities that collect information from fewer than 15,000 people, but the size of a business is not necessarily defined by the number of customers they have.
NetChoice looks forward to continued open and thoughtful consideration of this matter without undue pressure to find quick fixes.
NetChoice is an advocacy organization that fights threats to online commerce and promotes policies that protect Internet innovation and communication on a state, federal and international basis. The Washington, DC-based group protects Internet commerce-driven competition and battles rules that hinder consumer choice and hurt small businesses. For more information, see www.netchoice.org.