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The Subcommittee on Telecommunications, Trade and Consumer Protection

Orson Swindle, Former Commissioner

Good Morning, Mr. Chairman and members of the Subcommittee

Thank you for addressing this most important issue. My brief remarks focus on two concerns: first, any consumer privacy policy must not become a disadvantage for small business; and secondly, we must meet the challenges attendant with certifying small business compliance with any consumer privacy rules.

Obviously, it is essential that regulators, businesses, consumer groups, and privacy advocacy groups coordinate closely with Congress. We must all work together to ensure that consumer privacy is protected and that small business not be saddled with unnecessary regulatory burdens and costs. Small business is the backbone of our nation's economy and must be given the same opportunity as big business to realize the Internet's commercial potential.

The Commission's statement refers to these concerns in the discussion of Rulemaking. On page 18, we say that "the agency could expand on what constitutes adequate notice of a Web site's information practices, or adequate access, under various circumstances. Such interpretative rules would provide guidance for any industry seeking to qualify for safe-harbor certification as well as for any businesses that elect not to participate in an existing safe harbor program" (emphases added).

At issue is: how do we provide equal treatment and a safe harbor from liability for small business outside the umbrella of an industry association? There are hundreds of thousands of small businesses across the country, more and more of which are using the Internet to communicate with customers. It would be impossible for any agency, even with unlimited resources, to certify and monitor the web site of every small business seeking a privacy safe harbor.

Because of these compliance burdens, we must be both careful and creative. I hope that the Commission can find ways to allow small businesses to develop privacy policies that require neither membership in a trade association nor large expenditures of money or time. Businesses, trade associations, and advocacy groups may have ideas that are creative and cost effective, and the FTC can work with them to develop privacy rules that are effective, reasonable, and affordable. We must take advantage of technology and think creatively for the benefit of small businesses and consumers alike.

Mr. Chairman and members of the Subcommittee, I look forward to working closely with you as we tackle the challenge of consumer privacy policies on the Internet.

July 21, 1998