Multi-Industry Letter on Privacy Provisions in the FY13Appropriations Bill

The Honorable Daniel Inouye
Chairman
Committee on Appropriations
United States Senate
Washington, DC 20510

The Honorable Thad Cochran
Vice Chairman
Committee on Appropriations
United States Senate
Washington, DC 20510

Dear Senators Inouye and Cochran:

The undersigned associations write to express our significant concerns regarding a provision added to the report accompanying the Financial Services and General Government bill for Fiscal Year 2013, as reported by the Financial Services and General Government Subcommittee. Specifically, we encourage the full Committee to delete the Subcommittee’s report language directing the Federal Communications Commission (FCC) and the Federal Trade Commission (FTC) to (1) “issue guidance to consumers on best practices for protecting personal information transmitted over wireless networks,” (2) “study the privacy policies governing the collection and use of personal information online by major communications companies,” (3) and “issue guidance on best practices for disclosing the terms and conditions of these policies.”

This directive – which was passed by the Subcommittee without input from the Committees with jurisdiction over the FTC and FCC – is unnecessary and could have significant and negative impacts on the affected industries and American commerce generally. In summary:

• The Subcommittee seeks to enact substantive legislation through the “back door” of an appropriations bill. There is no law authorizing appropriations for funding the FCC to develop privacy guidelines.
• Committees of jurisdiction have neither held hearings nor approved legislation to this effect.
• Consumer privacy is a complex issue. Any new legislation considered in this area should be fully deliberated by Congress through the regular order.
• The Subcommittee’s report language has been added in a hasty process that gives industry and consumer stakeholders little opportunity to provide their views.
• Consumer privacy is already protected through existing consumer protection laws and industry self-regulation.
• Congress should not put new limits on beneficial data flows under the banner of privacy without fully considering the potential economic impacts and negative effects on consumers.
• The “Apps Economy” is only beginning to emerge and is continuing to evolve rapidly. Legislating on this app ecosystem at this time is premature and could stifle the growth of this promising economic sector.
• The White House and the FTC have both recently issued reports (based on multi-year processes that included public input) setting forth recommended privacy standards. The White House has proposed to address mobile privacy issues through its multi-stakeholder
  process and the FTC has also conducted efforts focused on mobile privacy. It is unnecessary and duplicative for the FCC to repeat these efforts.
• The White House and the FTC have specifically recognized the merits of industry self-regulation for addressing consumer privacy concerns in rapidly evolving markets and technologies.
• Industry codes of conduct provide flexibility, speed, and decentralization, and can address many policy challenges in the area of data privacy. Unlike government regulation or legislation, industry-developed codes can adapt in a timely manner to shifting technologies, business models, and consumer expectations. This flexibility also enables industry codes to deliver more detailed standards than would be feasible for more general regulation or legislation. Most importantly, such self-regulation can address privacy concerns without interfering with innovation, which benefits consumers by delivering paychecks, savings, and exciting products and services.
• In contrast, new regulatory restrictions could stop innovation, slow economic growth, reduce benefits for consumers, and result in job losses.
  We ask that this Subcommittee report language be removed before moving forward and not made part of any appropriation bill at this time. We also encourage the Committee to stipulate in the full Committee report that no funds appropriated in the bill should be used by the FCC or FTC to draft new privacy guidelines that have no statutory foundation and could harm American companies and consumers.

Thank you for your attention to this important issue.
 

Sincerely,
American Advertising Federation
American Association of Advertising Agencies
Association of National Advertisers
Consumer Electronics Association
CTIA – The Wireless Association®
Direct Marketing Association
Electronic Retailing Association
Interactive Advertising Bureau
Internet Commerce Coalition
Marketing Research Association
MPA – The Association of Magazine Media
National Business Coalition on E-Commerce and Privacy
Retail Industry Leaders Association
U.S. Chamber of Commerce

Cc: The Members of the Senate Committee on Appropriations

Read the Letter: 

14 - HILLLTR-Multii Industry LTR on privacy provisions in FY 13 Fin Serv Approps.pdf