Tech Giants Defend Privacy Practices

WSJ.com - 5/20/2011
AMY SCHATZ

WASHINGTON--Google Inc., Apple Inc. and Facebook Inc. defended their privacy practices Thursday to lawmakers considering how to update privacy laws to include more protections for Internet users.

At a Senate hearing on mobile privacy issues, lawmakers grilled technology executives on their policies and how they share consumer information with other companies. The hearing comes amid recent revelations that Apple's iPhone and Google's Android phones routinely collect information about the location of consumer cellphones. Apple has since limited the data it collects.

"I know you can shut off your location services but that doesn't do the trick because we want to use them," said Sen. John Kerry (D., Mass.), who recently introduced a privacy bill along with Sen. John McCain (R., Ariz.), which would establish consumer online privacy rights. "We still need a privacy standard. We still need basic rules of the road."

The Kerry-McCain legislation is among at least five new legislative proposals introduced so far this year by House and Senate lawmakers. The bills would update existing privacy laws and set new rules for broadband and mobile applications, such as creating requirements that companies allow consumers to decline online tracking.

Technology executives defended their practices, saying their companies have privacy policies and aren't responsible for the actions of software developers that may not have such policies and don't face rules on how they can collect or share consumer information.

"Trust is the foundation of the social web. People will stop using Facebook if they lose trust in our services," Facebook Chief Technology Officer Bret Taylor said.

Google Director of Public Policy Alan Davidson also talked about the need to retain consumer trust. At a similar Senate hearing last week, Mr. Davidson deferred on a question about whether the company would require apps developers to have clear privacy policies. Asked about that issue again, Mr. Davidson said the company hadn't made a decision on that yet but that "we think apps should have a clear understandable privacy policy."

Also at the hearing, the Federal Trade Commission said it is currently juggling several investigations involving privacy issues and mobile phones, including possible violations of children's privacy laws. David Vladeck, director of the FTC'S consumer protection bureau, said the investigations focus on possible violations of the Children's Online Privacy Protection Act, which restricts information that companies can collect on the online activity of children ages 13 and younger.

The FTC has brought 16 complaints against companies for violating the children's privacy rules over the past decade and collected more than $6 million in fines. Last week, the agency announced a $3 million settlement with Playdom Inc., an online gaming company that is now a unit of Walt Disney Co., for illegally collecting and disclosing personal information of hundreds of thousands of children without their parental consent.

On Wednesday, Senate Commerce Chairman Jay Rockefeller (D., W.Va.) sent letters to Apple, Google and the Association for Competitive Technology, a trade group for app developers and other technology companies opposed to e-commerce regulation, asking them to show that they are complying with federal children's privacy laws.

"I am concerned that some applications running on today's mobile platforms may be violating laws that are intended to protect children," Sen. Rockefeller said in the letters.



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