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Source: PioneerPlanet

Posted on March 2, 2001

      As U.S. lawmakers study legislation to protect consumer data on the Internet, a group of corporate executives is launching a $30 million to $40 million advertising campaign to show people how to protect their personal information online.

      The effort announced Wednesday by the Privacy Leadership Initiative is the latest corporate attempt to soothe nagging privacy concerns that have eroded public confidence in electronic commerce. Web users want assurances that the information they provide to businesses is not being used or sold without their consent.

      The Privacy Leadership Initiative is an alliance of business trade groups and executives from 15 U.S. companies including Ford Motor Co., Procter & Gamble and IBM. The group formed last year to develop voluntary corporate privacy standards.

      As the Internet becomes a central part of everyday life, online privacy has emerged as one of the nation's top consumer issues.

      About 35 million Americans shop on the Internet. Last year, they spent about $45 billion online. But U.S. companies missed out on another estimated $12.4 billion in online sales last year because some consumers were reluctant to share their personal information by making purchases over the Internet, according to Forrester Research, a technology research firm.

      Companies engaged in electronic commerce accumulate large amounts of information on their clients. The data, which include information on spending habits, income, occupation and financial status, can generate millions of dollars annually from advertisers seeking the most desirable customers.

      A Forrester survey found that two out of three Web users were ``extremely'' or ``very'' concerned about how that information is used.

      The corporate alliance intends to use television and print ads to try to educate consumers about how to protect their online information using current technology such as encryption, which scrambles information for unintended viewers, and memory protection software.

      A survey by the Privacy Leadership Initiative found that only 15 percent of consumers take advantage of the technology, said Walter O'Brien, executive director of the new alliance. ``We want to expand their field of knowledge so they know the choices they have,'' he said.

      ``Self-regulation is part of the solution, but consumers need baseline privacy laws guaranteeing their protections,'' said Edmund Mierzwinski, consumer advocate for the U.S. Public Interest Research Group, a national consumer rights group.

      The Federal Trade Commission, a government agency that monitors electronic commerce, took a similar position last year when it called for federal privacy legislation. Dozens of privacy bills are awaiting action in the U.S. Congress. They include legislation to protect consumers and Internet service providers from unsolicited electronic mail, establish a federal commission to study privacy protection, strengthen consumers' control over personal financial and health information, and stop the sale and purchase of Social Security numbers by financial institutions.

      In Minnesota, legislators will consider several privacy bills this session.

      One would preclude phone companies from selling lists of people based on the phone numbers they call. It would prohibit, for instance, the sale of lists of people who called a certain organization or type of business.

      While it's technically possible for telecom companies to do this, it doesn't appear any in Minnesota are doing it.

      Another bill would bar health care providers from sharing or selling patient data without written permission.

      Other bills would require financial institutions to generally obtain customers' written consent before sharing their personal information, such as account balances and purchase records, with outside parties, including telemarketers.

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