Majority Statement

• Senator John D. (Jay) Rockefeller IV

  Chairman

  U.S. Senate Committee on Commerce, Science, and Transportation
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  Majority Statement

  Senator John D. (Jay) Rockefeller IV

  Prepared Opening Statement – Senator John D. (Jay) Rockefeller IV, Chairman

  “A Status Update on the Development of Voluntary Do-Not-Track Standards”

  Wednesday, April 24, 2013 2:30 p.m.

  In February 2012, the Digital Advertising Alliance pledged that the online advertising industry would honor Do-Not-Track requests made by consumers.  That commitment was supposed to happen by the end of last year, 2012. What that was supposed to mean was that when consumers made it clear they did not want advertisers to collect information about their Internet activities, the advertisers would respect their wishes.

  It is now April 2013, and consumers are still waiting for these Do-Not-Track standards.  Advertisers are continuing to ignore Do-Not-Track headers and consumers’ requests for privacy. I have long expressed skepticism about the ability – or willingness – of companies to regulate themselves on behalf of consumers when it affects their bottom line.  That’s why, for the past two Congresses, I have introduced legislation that would create meaningful Do-Not-Track standards for consumers. 

  I do not believe that companies with business models based on the collection and monetization of personal information will voluntarily stop those practices if it negatively impacts their profit margins. Having said that, I want to be open-minded today, and I want to hear all sides on this matter.  

  For months, industry stakeholders, consumer groups, academics, and other interested parties have been in negotiations at the World Wide Web Consortium – known as the W3C – attempting to reach an agreement on voluntary Do-Not-Track standards. But conflicting reports about W3C negotiations continue to surface.  On one side, I hear that the online advertising industry is deliberately dragging its feet, moving the goal posts, and refusing to stop collection practices that undermine the very essence of a meaningful Do-Not-Track standard.  On the other side, I hear that two software developers in particular, Microsoft and Mozilla, have prevented the W3C from forging consensus on voluntary Do-Not-Track standards.

  Today, I want to get to the bottom of this controversy.  I want the witnesses to publicly explain exactly what they believe has gone wrong, and what they are prepared to offer to make Do-Not-Track a reality for consumers.  However, while I want to be fair and hear from all sides, I do not want to hear some of the familiar talking points that serve no purpose but to confuse the debate.  

  I do not want to hear that Do-Not-Track would jeopardize anti-fraud efforts, cybersecurity, or the Internet itself with a strict prohibition on any collection of information.  This is simply not true.   Everyone acknowledges that some limited collection of information is necessary in order to fulfill basic functions. My own bill clearly provides for this. Furthermore, I do not want to hear assertions that the current self-regulatory scheme fulfills Do-Not-Track requests.  

  A meaningful Do-Not-Track standard prohibits the collection of online information, except for a few narrow purposes.  Under the current “Ad Choices” campaign operated by the advertising industry, companies continue to collect vast amounts of consumer information and only promise to not use this information for specific purposes, such as targeted advertising.  

  In addition to my concerns that consumers’ choices are not being honored, I am also worried about the escalating rhetoric we have witnessed in the past few months from online advertisers about web browser developers.  Browsers are attempting to provide consumers with greater privacy protections and ad networks are resisting these efforts.  I am disturbed with the rhetoric from advertisers that suggests they might try to circumvent the sensible privacy protections that Web browsers are providing consumers.

  I urge everybody to take a deep breath and tone down the rhetoric.  We all need to remember that this debate is about consumers and their choices - consumers who may be happy to have their information collected for targeted advertising in some situations, but who may want advertisers to completely leave them alone at other times.  

  In this regard, I believe all sides should be prepared to compromise in order to maximize protection for consumers.  And I urge all of the witnesses today to spend less time attacking their opponents and spend more time thinking about how we can honor and respect consumers’ preferences.

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Minority Statement

• Senator John R Thune

  Ranking Member

  U.S. Senate Committee on Commerce, Science, and Transportation
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  Minority Statement

  Senator John R Thune

  Thank you, Mr. Chairman, for holding this hearing as the Committee discusses and evaluates consumer habits in the digital online economy. Thank you also to all of the witnesses for being here today to provide testimony.

  Online commerce and Internet use are a substantial and growing part of our overall economy and everyday lives. According to the research firm eMarketer, nearly 150 million Americans were “digital buyers” in 2012, collectively spending more than $340 billion online. To court this growing consumer base, more than $37 billion was spent last year on digital advertising.    

  As large as the online market already is, estimates for coming years predict continued growth. Both digital advertising and consumer spending are projected to grow by more than 50 percent by 2016, when 25 million more Americans are expected to be digital consumers. 

  The growing digital advertising industry provides thousands of small web publishers, the so-called “long tail” of the market, with the revenue they need to maintain their online presence. Contextual advertising—like an ad for running shoes on a website catering to runners— and general display ads make sense for some websites, but don’t necessarily make sense for all websites. The market has responded by developing new and innovative ways to deliver relevant ads and content to Internet users, but this has raised questions about consumer expectations and privacy. It is my hope that today’s hearing will be a thoughtful discussion on how we can provide consumers with greater choice of services and products, as well as increased confidence that their Internet experiences will be safe.

  Federal Trade Commission Chairman Ramirez recently gave a speech to the American Advertising Federation, in which she said that “an online advertising system that breeds consumer discomfort is not a foundation for sustained growth.” I agree, and it is precisely because of that dynamic that I believe web publishers, browsers, social networks, data analysts, and advertisers have an incentive to develop their practices to meet the evolving interests of consumers.

  I am interested to learn how efforts to regulate and legislate the intricacies of online commercial activity could impact the digital space. Will efforts to impose Do-Not-Track rules better protect consumers and grow online commerce? Or, are there situations where they might diminish consumer privacy, inhibit consumer choice, or raise barriers to entry for new competitors in the online market? The largest browsers and publishers have the means to adapt and survive in any environment, but smaller online companies and the choices they provide for consumers may not.

  I have faith that consumers armed with knowledge will take the time to make informed decisions in their own best interests. Consumers expect and seek more transparency, understanding, and control as they increasingly interact with online resources. And the market is responding. New tools are being presented and refined in response to consumers’ expectations. This spurs growth and innovation, which benefits both consumers and producers.  

  I am interested in our witnesses’ views on the dynamic Internet ecosystem, and the status of industry-developed standards for online conduct. Thank you all and I look forward to hearing your testimony. 

Testimony

• Mr. Harvey Anderson

  Senior Vice President of Business and Legal Affairs and General Counsel

  Mozilla
  Download Testimony (354.76 KB)

• Mr. Justin Brookman

  Director, Project on Consumer Privacy

  Center for Democracy and Technology
  Download Testimony (308.78 KB)

• Mr. Luigi Mastria

  Managing Director

  Digital Advertising Alliance
  Download Testimony (69.75 KB)

• Mr. Adam Thierer

  Senior Research Fellow, Mercatus Center

  George Mason University
  Download Testimony (168.84 KB)