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Push in Congress for Web users to control data

Consumers could keep online history private

By Mark Arsenault
Globe Staff / March 31, 2011

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WASHINGTON — Congress is preparing to wade into the largely invisible and, for most consumers, mysterious practices employed by Google, Facebook, and other websites to harvest information about the individual preferences of computer users, fueling a battle that could shape the future of the Internet.

Consumers would have more say in how their browsing habits and personal data can be used to customize advertising for their personal tastes, under Senate legislation being drafted by Senator John Kerry, with Senator John McCain, Republican of Arizona. Kerry said in an interview yesterday that individuals would never tolerate a private detective secretly recording their every move for the benefit of marketing agencies, so why, he said, should they permit it on the Internet?

“When you go on the Internet, are you as an American consenting to having your private activities shared with other people?’’ said Kerry, a Massachusetts Democrat.

The legislation, which would let consumers refuse to have their browsing history shared with marketers, could be introduced as early as next week. Although details have not been disclosed, Kerry said he has won the initial support of Internet giants Google and Microsoft and continues to consult with Facebook. He also has consulted with consumer and privacy advocates.

For Internet companies, Kerry said, “it’s better to have a standard established by Congress than have the Federal Trade Commission impose something.’’

Some online advertising firms and academic observers have sounded an alarm, warning that federal legislation could stifle innovation and raise the cost of popular Internet services such as search engines that consumers expect to be free of charge.

“There is a high level of concern about killing the goose that lays the Internet’s golden eggs,’’ said Adam Thierer, a senior research fellow at the Mercatus Center at George Mason University who studies free speech, Internet, and technology issues. “It potentially puts at risk the great free Internet we know today.’’

Search engines, for example, are free to use because they are powered by advertising. “My question is: What’s the harm of collecting that information? And have we considered the benefits of collection?’’

Google and Facebook, relative newcomers to Washington, are beefing up their Capitol Hill lobbying presence as they seek to shape the debate over their practices and growing market power. The FTC and the Department of Commerce issued studies on Internet privacy in recent months, warning that privacy concerns could undermine public trust in new Internet services, and could harm online commerce.

The FTC announced a settlement with Google yesterday over its sharing of information associated with the launch of its Buzz social-networking program.

Several online privacy bills have been filed in the US House, and Representatives Ed Markey, a Bay State Democrat, and Joe Barton, a Texas Republican, the cochairmen of the House Bipartisan Privacy Caucus, sent letters this week to major US cellular carriers, asking them for details about the way they track customers and store the data. Modern cellphones have GPS features that can pinpoint a customer’s whereabouts.

“Location, location, location may be the favored currency of the real estate industry, but it is sensitive information for mobile phone users that must be safeguarded,’’ Markey said in a statement.

The legislators’ request to the cell carriers was spurred by a New York Times story last week about a German politician who discovered that his cellphone carrier had logged his location more than 35,000 times in six months, according to Markey’s office.

Kerry said his legislation will be based on the concept that consumers deserve proper notice that their personal information is being collected and stored, and should have the right to opt out of data collection if they so choose.

“You can block some, block all — have a choice,’’ said Kerry. “Nothing is more precious in America than your privacy.’’

The legislation would be enforced by state attorneys general and the FTC, according to Kerry’s office.

Facebook declined to comment specifically on the Kerry proposal, but the company supports privacy protections and is “constantly innovating to give people greater control over their information,’’ Andrew Noyes, a Facebook spokesman, said in an e-mail. “That is also why we think it is important to engage in discussions with policy makers around privacy and related topics.’’

The top concern for legislation, Noyes said, should be addressing situations in which a consumer’s information is being shared with “companies with whom they do not have an existing business relationship.’’

A message left yesterday at Google’s press office was not returned.

Privacy advocates say the debate over consumer data mining is long overdue.

“People may be aware that there’s an enormous amount of information being collected on them, but they don’t know what’s being done with it,’’ said Chris Calabrese, legislative counsel for the American Civil Liberties Union. “That has enormous civil liberties implications.’’

But online advertisers, speaking through the Interactive Advertising Bureau, a trade and lobbying group with offices in New York and Washington, argue against new Internet privacy legislation, “which can become quickly outdated in the face of evolving technologies,’’ said Michael Zaneis, the group’s senior vice president and general counsel, in a letter last month to the FTC. “Formal rules could also serve as a disincentive to the marketplace to innovate.’’

The industry group believes “self-regulation’’ through professional standards by advertisers is “the appropriate approach for addressing the interplay of online privacy and online advertising practices,’’ Zaneis wrote.

The nonprofit Consumer Federation of America, a consumer advocate, said the worries over declining innovation and plunging online advertising revenue are overblown.

“There’s always hyperbole when new regulations are being considered,’’ said Susan Grant, the group’s director of consumer protection, in an interview. “Companies would have to be more forthcoming and respect the wishes of consumers.’’ That means “some consumers might say they don’t want their data used, but I doubt that means the end of Internet advertising.’’

Mark Arsenault can be reached at marsenault@globe.com.