Long-awaited privacy bill unveiled

Initial reaction is mixed

WASHINGTON (Reuters) -- Several U.S. lawmakers introduced a long-awaited privacy bill Wednesday that would allow U.S. businesses to share information about customers who have not explicitly forbidden them to do so.

More than a year in the making, the privacy bill unveiled in the House of Representatives differs from a competing bill making its way through the Senate that would require businesses to get consumers' explicit permission before sharing sensitive information such as income level, religious affiliation or political interests.

U.S. Rep. Cliff Stearns' bill would instead leave companies free to share customer profiles unless customers specifically forbade them.

The bill would cover transactions both on the Internet and in the "offline" world, and would override state laws that place more restrictions on commercial use of personal information. Sponsors said the bill would establish basic privacy protections for consumers while minimizing the impact on business.

Stearns, a Florida Republican whose consumer-protection subcommittee held six hearings on privacy last year, said the free flow of consumer data has been a cornerstone of the modern information-based economy.

"The underlying principle that anchors this bill is, 'do no harm,' " he said.

Consumers would have no right to sue if their privacy was violated. Enforcement would be left in the hands of the Federal Trade Commission, which usually does not impose fines on a first offense.

Companies submitting to a self-regulatory privacy regime such as TRUSTe or BBBonline would enjoy protection from FTC actions.

Attracting attention

While lawmakers have introduced dozens of privacy bills in the House since the beginning of last year, none has attracted as much support as Stearns' measure. The bill has lined up 22 co-sponsors from both sides of the aisle, among them Rep. Billy Tauzin, the Louisiana Republican who chairs the House Energy and Commerce Committee.

Rep. Rick Boucher, a Virginia Democrat, said businesses would be free to set more restrictive privacy practices on their own as a way to market themselves.

"I'll predict a much greater level of Internet usage with these privacy policies in place," Boucher said.

Initial reaction to the bill was mixed.

A group of business leaders from high-tech firms said the bill struck the right balance between consumers and businesses, while the U.S. Chamber of Commerce said it was not needed because businesses could handle privacy concerns on their own.

Privacy advocates said the bill was a step backward, especially by not providing extra protection for sensitive information.

"Americans care about sensitive information. This bill does not address those issues," said Ari Schwartz, a senior policy analyst at the Center for Democracy and Technology.

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