Mozelle W. Thompson took a stroll last summer through the Silicon Alley Street Fair, a celebration of New York City's dotcoms back when they had something to celebrate. His T-shirt and shorts belied his high office as a member of the Federal Trade Commission, the federal agency that has taken the lead in consumer privacy protection online. He met the chief executive of a high-technology company that gathers personal data on Internet users, a man who was, Thompson said, "treating people as data instead of treating people as people."
Thompson asked the executive whether he worried that regulators might someday crack down on his business practices. Thompson's eyes go wide as he recalls the man's answer: "I'm going to do as much as I can, as fast as I can -- until somebody stops me." As for the FTC, Thompson said, "He didn't know me, and he didn't know us. But I assured him he would."
Politics of privacy
Since then, the world has changed, and not just for the dot-coms. Momentum has dissipated in Washington for new laws and regulations that might restrict the use of cookies and other high-technology tools by businesses to monitor Internet users' activities. Some lawmakers say the politics of privacy is so sensitive and complex that a deliberate approach is best -- but there is growing agreement that some kind of government action will eventually have to emerge.
Thompson still serves on the FTC, but Robert Pitofsky, the chairman who led many of the commission's privacy initiatives, has been replaced by Timothy J. Muris, a former trade official in the Reagan administration who has said he is still studying the privacy issue. President Bill Clinton, who appointed Pitofsky and Thompson, has been replaced by George W. Bush, whose executive branch team has been less than enthusiastic about expanding regulatory authority over businesses.
Legislation
Movement toward legislation restricting invasions of privacy by business has slowed in Congress as well: although the chairman of the Senate Commerce, Science and Transportation Committee, Ernest F. Hollings, has a strong interest in privacy, the Senate is currently bogged down in the appropriations process and other issues. Leadership of the House of Representatives has called for the debate to be refocused on the misdeeds by Uncle Sam rather than private companies.
"Let's see to it that the government is handling privacy mandates properly before we start mandating privacy rules for the private sector," House Majority Leader Dick Armey said in an interview, citing such examples as government Web sites that store personal information, the controversial FBI Internet wiretap system known as Carnivore and cameras that photograph motorists who run red lights.
Some in Congress say the loss of momentum to regulate technologies such as cookies can be attributed to a more subtle understanding of the interplay between privacy and technology. Sen. Patrick Leahy who has long been concerned about privacy issues, said he and other lawmakers have realized that simplistic responses to privacy fears, such as sharply restricting the use of cookies, would do more harm than good.
Thorny issues
"Cookies have gotten bad press as a surveillance tool, but they also make Web site visits faster and online transactions more hassle-free," Leahy said. "These are important functions for Internet users, and any regulation of the use of cookies must be sufficiently nuanced to ensure that we do not throw the proverbial baby out with the bath."
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