[Congressional Record Volume 143, Number 107 (Friday, July 25, 1997)]
[House]
[Pages H5809-H5810]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
USE OF THE INTERNET
The SPEAKER pro tempore. Under a previous order of the House, the
gentleman from Minnesota [Mr. Vento] is recognized for 5 minutes.
Mr. VENTO. Mr. Speaker, today I rise to speak with regard to the
matter of personal privacy and the absolute vulnerability and risks and
abuses that are taking place with regard to personal privacy. I
specifically want to reference the use of the Internet, the Internet
system, the online service providers and web sites that exist on the
Internet. The Internet, of course, is accessible through our computers
and the online services that we purchase.
Earlier this year, in fact last year, in 1996, I first introduced
legislation that would require an affirmative action by the individual
Internet user, the subscriber, to permit the use of personal
information; that is to say, the telephone numbers, the e-mail address,
and the profile that is possible. A service provider or for that matter
a web site can in fact, through the information and activities that an
individual uses on the Internet, can in fact make almost a complete
profile of all the web sites that you visit and utilize.
They can do this, quite frankly, without the knowledge of an Internet
user; that is, a subscriber or web site can in fact do that. It is as
if you are walking down the street with $100 bills sticking out of your
pocket and you are not aware of it. That is to say, we as individual
Internet users are very vulnerable.
Of course, as I introduced that bill last September and reintroduced
it this past January, H.R. 98, I hope some Members will join me in
terms of requiring affirmative approval of a service provider or a web
site to use personal information about an individual that is using the
Internet.
{time} 1415
And this had been the subject this past June, and I might commend
Commissioner Varney of the Federal Trade Commission for the work she
had done at that time, she has since left the FTC, but this June she
had a seminar and a series of meetings on, in fact, personal privacy on
the Internet.
At that time some of the service providers, namely Netscape, the one
that we use, incidentally, in the House of Representatives, and
Microsoft pointed out they were going to make efforts to provide for
personal privacy and some security. But 7 weeks after that, this week
we picked up the paper, the Washington Post here yesterday in
Washington, DC, and it says America Online, one of the service
subscribers, will share the users' numbers for telemarketing.
Eight and a half million individuals are customers of America Online,
and they were going to share their personal telephone numbers, and I
assume their E-mail addresses, for sale. They were going to receive
money back for this information. They were going to receive $150
million back for sharing the personal information, sharing the privacy,
selling for profit the personal privacy of the users to the tune of
$150 million.
Well, that is wrong. And the fact was that after this became public,
this has been out for some time that they were going to do this but
they did not share it, it was like looking for a needle in a haystack
trying to discover what America Online was doing, but after that, after
this happened, America Online, I am pleased to report, has backed off
their plan to give out phone numbers.
I think what this does point out in living color and in graphic
detail is the vulnerability, as suggested in the legislation I have
introduced, H.R. 98, of individual Internet users to have the abuse,
the involuntary sharing, even being unaware sharing of their personal
information.
It is really unbelievable, as I said yesterday, that America Online
would be cashing in for profit by selling the personal privacy of their
users. The fact is that we need to correct this problem. We need to
have some standards.
I think most of us are very leery of any type of censorship with
regards to information. We do not want to thwart the development and
limit the development or the availability of information, or the
development for that matter and use of the Internet, but the risk we
run here is that the Internet is going to be filled or be a great
wasteland in the fact that it will not have any type of security.
There will not be the type of credibility and certainly not the
responsibility on the part of the Internet user. We will not know when
we purchase something whether we are participating in a transaction,
whether, in fact, a communication or message, or just a complete
absence of security or personal privacy.
So I urge my colleagues to join in sponsoring H.R. 98 after they have
seen this graphic example of abuse by America Online with regards to
personal privacy.
Mr. Speaker, I provide for the Record two articles covering the issue
I have just been discussing.
[From the Washington Post, July 24, 1997]
AOL Will Share Users' Numbers for Telemarketing: Consumer Groups,
Privacy Advocates Call Subscriber Notification Inadequate
(By Rajiv Chandrasekaran)
America Online Inc. plans to disclose the telephone numbers
of its 8.5 million subscribers to certain business partners
for telemarketing purposes, a decision that industry
specialists say could generate a financial windfall for the
online service but anger many of its customers.
AOL said it will make the subscriber information available
to companies such as consumer-services firm CUC International
Inc., which signed a $50 million marketing arrangement with
AOL last month. Such agreements, which industry analysts say
could become more common because of the telephone list, are
an increasingly important source of revenue to AOL as it
seeks to reduce its dependence on monthly user fees.
The new policy is outlined in AOL's revised user rules,
which were posted online earlier this month and become
effective on July 31. The policy allows users to request that
their phone numbers not be disclosed to telemarketers.
The company's decision, however, has outraged consumer
advocates, who say AOL members have not been adequately
informed of the new policy, which as of yesterday evening had
not been mentioned on any of the screens a user sees when
logging on.
``Their disclosure is not good enough,'' said Jean Ann Fox,
the director of consumer protection at the Washington-based
Consumer Federation of America. ``This sets a new low in
turning subscribers into a commodity.''
Although it is a fairly common practice for companies to
sell customer information--
[[Page H5810]]
AOL has long offered the names and addresses of its
subscribers to direct-mail marketers--disclosing phone
numbers is a rarer practice, industry experts said. ``It's
not at all common in the online world,'' said Patrick Keane,
an analyst at market-research firm Jupiter Communications in
New York.
AOL's decision comes just as the company largely has
repaired customer relations frayed by widespread busy signals
that occurred on the network in the winter and spring because
the company failed to anticipate the demand a flat-rate
pricing plan would generate. The new policy, some analysts
said yesterday, risks re-opening old wounds.
``They're walking a fine line with a customer base that
already has been nettled,'' Keane said.
AOL officials played down such concerns, saying they
believed most subscribers would welcome the solicitations.
``We're telemarketing to our members goods and services we
see as benefits of their AOL membership,'' said spokeswoman
Tricia Primrose.
Primrose said AOL does not plan to publicize the new policy
before July 31, but will notify members before they begin to
receive calls. ``We're going to give them every
opportunity to get off this list,'' she said.
Privacy advocates contend, however, that AOL customers
should be asked in advance if they want to be on
telemarketing lists. The advocates also say that as an online
service, AOL should be held to a higher standard in
protecting customer information than companies that don't do
business in cyberspace.
``Many people who subscribe to AOL like the feature that
they have a certain distance between their use of the
keyboard and the outside world,'' said Robert Ellis Smith,
editor of Privacy Journal in Providence, R.I. ``They don't
have to give out a physical address or a home number. Now AOL
is suddenly exposing these customers to intrusions at home
during the day.''
Initially, AOL plans to offer the phone number to two
companies, CUC and Tel-Save Holdings Inc., a long-distance
company with which AOL signed a $100 million marketing
agreement earlier this year, Primrose said. CUC and Tel-Save
do not plan to start telemarketing until later this year, she
said.
AOL plans to screen the telemarketers' solicitations,
Primrose said. The company now monitors mailings that are
sent to its customers by firms who purchase its subscriber
mailing lists, she said.
AOL's mailing lists include members' names and addresses,
as well as demographic profiles, with information such as
household income and past buying habits, that the company
says it obtains from outside marketing databases.
____
[From the New York Times, July 25, 1997]
America Online Backs Off Plan To Give Out Phone Numbers
(By Seth Schiesel)
Responding yesterday to consumer outrage and mounting
concerns about privacy in cyberspace, America Online, the
largest on-line service provider, abandoned its plans to
begin providing lists of its customers' telephone numbers to
telemarketers and other direct-sales peddlers.
The reversal came less than 24 hours after the plan became
widely known through news accounts and on-line postings.
America Online drew immediate fire from politicians and
privacy-rights groups for the telemarketing venture, in part
because the company for years had assured subscribers that it
would not release their phone numbers and other personal
information to outside parties.
Because America Online's eight million subscribers are
already besieged by ``junk'' electronic mail, customers
bemoaned the prospect of some of those same advertisers, or
different ones, ringing the phone at home.
``That's the most obnoxious form of solicitation,'' said
Camilla M. Herlevich, an environmental lawyer in Wilmington,
N.C., an America Online subscriber. ``They always call at
dinner time. We call it the arsenic hour.''
But the controversy goes beyond telephone numbers--and
transcends America Online, for that matter.
For consumer-privacy advocates, the case illustrates the
need for increased Government oversight of the buying and
selling of the copious consumer information gathered in the
course of everyday commerce. Savvy companies already mine the
trove of available credit card information to find buying
patterns that might lead to one more sale.
But with the advent of cyberspace commerce, marketers are
able to track their quarry even more easily--tracking each
click of the mouse, in some cases, as a user surfs the World
Wide Web. So far, such efforts typically can identify no more
than a user's computer, and not the identity of the
individual operating the PC.
Experts predict, however, that personal identification will
eventually be possible, making privacy difficult to protect--
whatever the stated policies of companies collecting such
data.
Like magazines and other businesses with valuable
subscription lists, America Online has already been selling
lists of its subscribers' names and addresses. But those
lists do not include the corresponding E-mail addresses or
customer phone numbers. A few weeks ago, however, America
Online quietly proposed changing its longstanding policy to
begin selling its telephone lists.
Privacy advocates said that adding phone numbers to the mix
would allow marketers to cross-tabulate with additional sorts
of information that people might not be aware they were
exposing by simply signing up to an on-line service.
``The phone number is used as an identifier the way that
the Social Security number is,'' said Evan Hendricks, the
editor of Privacy Times, a privacy-rights newsletter. ``They
can use the phone number to look up the name and address and
then you can find out about their house and how many kids
they have.''
Telemarketers and other direct-sales organizations have
resisted Government regulation by agreeing to self-imposed
privacy-protection guidelines that typically include
provisions allowing consumers to request that their personal
data not be sold to third parties. But the America Online
episode is certain to raise new questions about whether the
industry can continue to police itself.
``It's unbelievable really, that AOL would be cashing in
for profit by selling the personal privacy of their users,''
said Representative Bruce F. Vento, Democrat of Minnesota,
who has introduced a bill to regulate the use of consumer
information on line. ``It just boggles the mind that they
would do it quite this boldly.''
America Online would not reveal how many of its members
called, faxed or sent electronic mail to the company to vent
their displeasure. America Online executives insisted that
they did not intend to ``rent'' the phone numbers. Instead,
they said, America Online would provide the numbers to
companies only as one part of an overall marketing deal.
``The only calls we intended for you to receive would have
been from AOL and a limited number of quality-controlled AOL
partners,'' said Stephen M. Case, the company's chief
executive in a letter to subscribers yesterday.
Those partners would have included Tel-Save Inc., a
discount long-distance telephone company that reached a $100
million marketing pact with America Online in February, and
CUC International Inc., a telemarketing giant that made a $50
million deal with America Online last month.
America Online officials said yesterday that those pacts
were broad based and would not be affected by scrapping the
plan to share telephone lists.
``We said, `It's so insignificant, just drop it,' '' said
Robert W. Pittman, chief executive of America Online's
operating subsidiary. ``For it to get this blown out of
proportion says we really screwed up the communication.
``At the end of the day we didn't want to soil our
reputation or confuse our members.''
The members were certainly confused, or at least angry.
Internet bulletin boards were ablaze with irate missives
about the company, some of them profane. Many of the
complaints stemmed from the fact that America Online had
tucked its only notice of the proposed policy shift in an
obscure corner of the service. The notice had been posted on
July 1, but did not come to widespread attention until
Tuesday.
``Unless you stumbled across it you wouldn't know unless
you saw it on the evening news,'' said David Cassel, a
freelance writer in Berkeley, Calif., who runs an Internet
mailing list about America Online that has 12,000
subscribers. ``People thought it was exploitative, deceptive
and instrusive. People were outraged.''
The Federal Trade Commission has been investigating
marketing practices in cyberspace since last summer, most
recently holding a series of four ``workshops'' with industry
groups last month.
Yesterday, noting that credit cared companies often pitch
services to their customers based on analysis of spending
patterns, Commissioner Christine Varney said: ``The
difference in perception is that people believe that AOL
knows a whole lot more about them or has the capacity to know
a whole lot about them than American Express does. Presumably
they can see where you go, what you do, where your email
comes from, who you're sending it to.''
Earlier this month the commission's staff sketched the
outlines of a regulatory structure for Internet advertising
when it determined that a World Wide Web site called KidsCom
had probably engaged in deceptive practices when it collected
personal information from children and used the data for
marketing purposes without the consent of parents.
But the commission has not issued any regulation on
Internet marketing aimed at adults, and is still leaning
toward allowing the industry to police itself.
``It's about creating a dialogue with industry, and this
marketplace is not going to work unless consumers have
confidence in it,'' said Victoria Streitfeld, a commission
spokeswoman. ``The real effort has been to really not have
Government come down on this emerging technology but to raise
the issue.''
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