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Potomac Crossings --By George Mason FTC Opts In "Politicians act like jealous dogs," says James Davidson, " They want to establish their dominion over any new sphere of wealth that technology and economic development bring to the fore. To that end, they are content to impose ruinous costs on anyone who threatens to escape their thrall." There are more than two million direct shareholders of Microsoft, for example, and tens of millions of mutual fund shareholders. The actions of the Justice Department have lowered the market capitalization of Microsoft by over $100 billion. That's a loss of measurable, real wealth. James Glassman observes " the Internet intervention of government … threatens every high tech firm in America." The timeshare industry perpetually looks forward to developing effective cost savings in sales and marketing. Innovations that lower sales costs boost residual values for owners as well. The lower the percentage of the purchase price represented by intangible or repeatable expenses the higher the possible resale valuation. A promising key to reduced sales costs has been the Internet. Data mining allows a more careful targeting of legitimate prospects. Permission marketing creates a practical way to use relationship-marketing techniques at minimal expense. Data base mining and profiling have become such powerful tools that Representative Curt Weldon (R-PA) is advocating the establishment of a new government-wide data mining agency that would integrate 28 intelligence community networks as well as selected data bases from other government agencies. As reported in the AFIO weekly newsletter, Rep. Weldon wants to start right away. " In the 21st Century," he says, " you have to able to do massive data mining." Federal privacy protection legislation will be a major issue in the elections. The Clinton Administration has already staked out its policy position. It favors federal legislation restricting disclosure for commercial purposes provided there is a series of exceptions for government access to the data. "In both health and finance," Ronald Weich, a Legislative Consultant for the ACLU, testified, " the Administration favors virtually unlimited government access for health and law enforcement reasons." Enter the FTC with a reversal of standing policy. On its own initiative, not at the behest of Congress, the Federal Trade Commission has concluded that industry self-regulation is not good enough and enforceable Internet privacy standards must be written and adopted by Congress. Senator Richard Bryan (D-NV) and Senator Fritz Hollings (D-SC) introduced the bill - called the Consumer Privacy Protection Act of 2000. The Republican reaction was summarized by Representative Tom Davis (R-VA) who said, " in an election year, the Democrats like to stir things up a bit." Nevertheless, sophisticated Internet-based marketing techniques will be slowed down while the subject is debated. Industry will hold that self-regulation is sufficient and government will express concern that self-policing leaves no way to punish offending Web sites. In other words, compulsion is necessary to establish legal rights for consumers. The next President will appoint the next Chair of the FTC. The issues up for debate this fall will include: 1. The abuse and misuse of personal financial and health information and data about or from children. 2. Credit card fraud and identity theft over the Internet. The legislation being discussed would prohibit Internet Service Providers (ISP's) or commercial websites from collecting, using or disclosing personally identifiable information unless they were in compliance with the legislation. Specifically, anyone collecting name, addresses or credit card data must provide clear and conspicuous notice as to what will be collected, how the information will be used and what disclosure policies the company follows. The written privacy policy may not be confusing, incomplete or inconsistent. The bill requires a stringent "opt-in" provision whereby consumers would have to grant in advance their affirmative consent before their information could be collected and disseminated. The bill would also assure that consumers have the right to have reasonable access to their own information and an opportunity to correct, deny or supplement their files. ISP's would be responsible for strict protection of the security of the information collected. Retribution would be prohibited. Access cannot be denied to anyone who decides not to consent. Furthermore, the consent or denial cannot be changed by anyone except the user. Finally, the bill established an FTC Office of Online Privacy to produce findings and recommendations for additional regulations in the future. The Electronic Privacy Information Center (EPIC) publishes an annual survey based on the top 100 retail Websites and their degree of compliance with Fair Information Practices. They also identify whether or not the site uses profile-based advertising and employs cookies. After three years, they have concluded that the current practices of the online industry provides little meaningful privacy protection for consumers and that consumers are more at risk than they were in 1997. "Anonymity," they conclude, " is being squeezed out by the rise of electronic commerce. Profiling is more intensive and marketing more intrusive. Profile-based advertising could easily be considered a form of online surveillance." Key findings of the EPIC study include: One hundred percent of the sites collected personally identifiable information for purchases or business transactions but none collected data from browsing users or required data to enter the site. Eighteen percent had no privacy policy but 51 percent displayed the privacy policy on their home page. Thirty-five percent displayed a link to all pages that collected personal information. Twenty percent of sites participated in industry self-regulation programs. Twenty-four percent had opt-in consent policies. Thirty-three percent allowed users access and the ability to correct personal data. Twenty-one percent limited the use of personal data to the requirements of the transaction. Some 58 percent specified the purposes for the collection and use of the information. Eighty-six percent of the sites used cookies. In total, 35 percent of the sites allowed advertising by advertising networks but did not inform the user that such advertising was taking place. The biggest concern for EPIC was that every consumer inquiry about a product and every ad viewed could quickly become incorporated into a detailed profile that would remain hidden from the consumer. Although not specifically mentioned in the Constitution, privacy is an American core value viewed as a fundamental right embodied in both the 4th and 14th Amendments and recognized by many Supreme Court precedents. The Commissioners noted that it is preferable that new legislation is not needed because the Internet proves to be able to regulate itself. But, if industry alone proves insufficient, consumer privacy will be protected by legislation.

### George Mason, 1725-92, was known as the Sage of Gunston Hall. His Virginia declaration of rights, written in 1776, was the model for the first section of the Declaration of Independence. A friend of Patrick Henry and Thomas Jefferson, Mason was an original drafter of the Constitution and the first ten amendments to the Bill of Rights. He refused, however, to sign the final version of the Constitution because he thought it did too little for individuals and, without the Bill of Rights, gave too much power to the government.This column honors his memory. CURRENT NEWS: ALL HEADLINES Timeshare || Financial || Resorts/Casinos || Misc. Travel || NEWS ARCHIVES STATISTICS WHO'S WHO EMAIL SEARCH HOME To report broken links or other problems with this site please contact: webmaster@thetimesharebeat.com ©1999-2000 The Timeshare Beat all rights reserved