[Congressional Record (Bound Edition), Volume 146 (2000), Part 2]
[Senate]
[Page 1510]
[From the U.S. Government Publishing Office, www.gpo.gov]



                            INTERNET PRIVACY

  Mr. HOLLINGS. Mr. President, I want to bring to the Senate's 
attention an article from today's TheStreet.Com entitled ``DoubleClick 
Exec Says Privacy Legislation Needn't Crimp Results.'' For many 
Americans, the fear of a loss of personal privacy on the Internet 
represents the last hurdle impeding their full embrace of this exciting 
and promising new medium. In addition, many other Internet users 
unfortunately are today unaware of the significant amount of 
information profiling that is occurring every time they visit a web 
site. Notwithstanding the significant privacy concerns raised by such 
surreptitious activity, many companies continue to oppose even a basic 
regulatory framework that would ensure the protection of consumers' 
privacy on the Internet--a basic framework that has been successfully 
adopted with respect to other areas of our economy. That is why I was 
so pleased to see a leading Internet Executive from DoubleClick state 
that his company would not ``face an insurmountable problem'' in 
attempting to operate under strict privacy rules. Complying with such 
rules is ``not rocket science,'' the executive stated, ``It's 
execution.'' Obviously, what this gentleman has asserted is that strict 
privacy rules would not impede the basic functionality and commercial 
activity on the Internet. I look forward to working with my colleagues 
on the Commerce Committee to draft legislation in this area and hope 
that others in industry will join DoubleClick's apparent willingness to 
implement pro-consumer privacy rules.
  I ask unanimous consent that an article entitled ``DoubleClick Exec 
Says Privacy Legislation Needn't Crimp Results'' be printed in the 
Record.
  There being no objection, the article was ordered to be printed in 
the Record, as follows:

                [From the Street.Com, February 24, 2000]

    DoubleClick Exec Says Privacy Legislation Needn't Crimp Results

                           (By George Mannes)

       The worst-case scenario for DoubleClick (Nasdaq:DCLK--news) 
     may not be so bad after all.
       The Internet advertising company has suffered a barrage of 
     negative publicity recently over the information it gathers 
     on people's online activities. News that the Federal Trade 
     Commission is conducting an informal inquiry into the 
     company's data-collection policies was among the developments 
     that prompted a 23% decline in the stock's price over the 
     past week. (It rose 1 47/64 Wednesday to close at 85 55/64.)
       But at a Wall Street conference Wednesday, a DoubleClick 
     executive at the eye of the data-collection storm told 
     investment professionals that even the worst outcome for 
     DoubleClick wouldn't present a major hurdle to its business 
     plans.


                             Rocket Science

       Jonathan Shapiro, senior vice president and head of the 
     company's Abacus Online Alliance, told a group of attendees 
     at the eMarketing2000 conference hosted by C.E. Unterberg 
     Towbin that DoubleClick would be able to find a way to 
     operate under stricter privacy rules. ``It's not rocket 
     science,'' Shapiro said. ``It's execution.''
       Shapiro's comments come in the wake of assertions by 
     activists and at least one senator that, to protect people's 
     privacy online, DoubleClick and other online marketers should 
     be restricted from continuing current information-collection 
     policies. That hasn't sat well with DoubleClick, whose 
     president suggested last week that such restrictions would 
     hurt the company and threaten the financial health of all 
     Internet companies relying on advertising revenue.
       As part of its strategy to help marketers finely target 
     their advertising messages, DoubleClick is in the process of 
     merging anonymous profiles of the online behavior of millions 
     of Web surfers with information from its recently acquired 
     subsidiary Abacus Direct. The company's goal is to tie as 
     many of the anonymous online profiles as it can to its Abacus 
     database, which details the names and off-line purchasing 
     habits of millions of consumers.


                               opting out

       At issue is how easily DoubleClick will be able to attach 
     names and addresses to its anonymous online profiles. The 
     company hopes it will be able to continue its current ``opt-
     out'' process. Under that procedure, if people register by 
     name at a DoubleClick-affiliated site such as Alta Vista, 
     DoubleClick can attach that name to the information it 
     gathers from different sites and through Abacus Direct, 
     assuming the person has been sufficiently warned and hasn't 
     specifically refused to the arrangement, or ``opted out.'' In 
     contrast, the privacy bill that Sen. Robert Torricelli (D., 
     NJ) introduced this month would prevent DoubleClick from 
     collecting personally identifiable information unless surfers 
     have ``opted in,'' or specifically agreed to the arrangement.
       But even if DoubleClick were required to switch from opt-in 
     to opt-out, the company wouldn't face an insurmountable 
     problem, according to Shapiro. ``If we have to go to opt-in . 
     . . we'll get people to opt in,'' he told a small group of 
     investors at a breakout session.
       Asked how the company would be able to do this, Shapiro 
     made it sound like no big deal. ``You'd do a value 
     exchange,'' he said, outlining a scenario in which the 
     company could easily get 20 online merchants with which it 
     does business to each contribute a $10-off to a coupon book. 
     Then DoubleClick could use that coupon book as an incentive 
     to have online consumers opt in. The merchants, not 
     DoubleClick, would absorb the cost of the coupons, and 
     consumers would benefit by receiving a $200 value, he said.


                           lifting the gloom

       Shapiro's comments stand in contrast to the gloomy 
     statements made last week by DoubleClick President Kevin Ryan 
     who said if companies were forced to get Internet surfers to 
     opt in, ``it would be extremely hard for the Internet to be 
     successful.'' Ryan may have been talking about having to get 
     permission even to create anonymous online data, not just 
     personally identifiable profiles.
       But a reading of Torricelli's bill, as well as an FTC 
     complaint filed by the Electronic Privacy Information Center 
     indicates that proponents of opt-in want it only for 
     personally identifiable information. ``If there's a realistic 
     assurance that the information collected will remain 
     anonymous and not be tied to an actual identity, there is no 
     real need for an affirmative opt-in,'' says David Sobel, 
     general counsel for EPIC.
       In a further indication that opt-in isn't a life-or-death 
     issue for DoubleClick, Shapiro said the company wouldn't have 
     to personally identify all the now-anonymous surfers in its 
     database before the Abacus information would be useful. What 
     DoubleClick will be able to do, he said, is to use a sample 
     of identifiable surfers--for whom it has personally 
     identifiable purchasing histories and online habits--to make 
     an educated guess at the buying habits of surfers who remain 
     anonymous. DoubleClick believes that tactic will be possible 
     using information from about 5 million personally 
     identifiable Internet users--a sample size the company hopes 
     to amass by the end of the year. So far, the company has 
     between 100,000 and 200,000 profiles in its combined off-
     line-online database, Shapiro said.
       But that doesn't mean the company would be ready to quit 
     after collecting 5 million of these profiles. ``We would like 
     to, over time, learn who people are,'' Shapiro said.

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