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Senators Kerry, McCain Introduce Privacy-Protection Bill

A bill introduced in the U.S. Senate today would require companies to protect personal information they collect online and allow consumers to opt out of having businesses store their data.

The 2011 Commercial Privacy Bill of Rights Act, introduced by Senators John Kerry, a Democrat from Massachusetts, and John McCain, a Republican from Arizona, directs the Federal Trade Commission and state attorneys general to verify that companies follow the measure’s provisions, which include limiting the amount of information online trackers collect.

“Plenty of companies collect data and use it with high ethical standards,” generating economic growth that “benefits all of us,” Kerry said today at a news conference unveiling the bill.

Ill-intentioned companies “can do virtually anything they want” with the personal information of Web users, who have no legal means to control the collection of their data, he said.

“The bill isn’t perfect,” and is the result of negotiations, McCain said at the news conference. The bill provides a starting point for further discussion, he said.

The bill “correctly recognizes that a balance must be struck between regulations that slow down innovation and those that protect consumers,” Daniel Castro, an analyst at the Information Technology and Innovation Foundation, a research institute that promotes innovation, said in a statement.

No Do-Not-Track

“The potential economic consequences of certain requirements” can “have a negative impact on the Internet ecosystem,” which contributes $300 billion annually to the U.S. economy, Castro said.

The bill does not include so-called do-not-track provisions, which limit Web companies from tracking online consumers browsing habits. Kerry said he didn’t think the option was necessary.

The measure also allows for safe-harbor programs, in which some information-collecting companies may receive an exemption from some elements of the bill. Participating companies would design their own privacy plans that nongovernmental organizations, approved by the FTC, would certify. These businesses would not be required to comply with the strictest provisions of the bill, Kerry said.

Allowing companies to create their own privacy programs was necessary to win support from consumer and industry groups, Kerry said.

Backing the Legislation

Hewlett-Packard Co. (HPQ), Microsoft Corp. (MSFT), EBay Inc. (EBAY), Intel Corp. (INTC), Verizon Communications Inc. (VZ), the Consumers Union and the Consumer Federation of America are among companies and groups that support the bill.

“We have long advocated for comprehensive federal privacy legislation, which we believe will support business growth, promote innovation and ensure consumer trust in the use of technology,” according to a joint statement today from Hewlett- Packard, Microsoft, EBay and Intel.

“The complexity of existing privacy regulations makes it difficult for many businesses to comply with the law,” according to the companies’ statement.

“The senators’ desire to ensure consumers can engage in interstate commerce and trust that their information will be treated properly” is appreciated, TechAmerica, a technology industry association, said today.

The organization “believes strongly that industry codes of conduct and technological solutions can and should be the primary methods of protecting consumer privacy,” according to the statement.

To contact the reporter on this story: Juliann Neher in Washington at jfrancis31@bloomberg.net

To contact the editor responsible for this story: Allan Holmes at aholmes25@bloomberg.net

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