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Tech Firms Fear Privacy Lawsuits

David A. Utter
Staff Writer
Published: 2006-06-22

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A dozen high-powered companies inside and outside of the technology industry jointly requested Congress pass a law to protect the privacy of consumers, while insulating them from being "brought to their knees" by class-action lawsuits.

Tech Firms Fear Privacy Lawsuits
Identity Protection Is Serious Business

Do you think Congress will pass a federal privacy law? Will it benefit the Internet-using public more, or the companies it would shield from litigation over identity theft? Make your thoughts public at WebProWorld.

Efforts by Google and other technology companies to drum up support for federal privacy legislation appear to be motivated by a desire for protection from civil actions in the event of a privacy breach as much as ensuring Internet users keep using the Web for commerce.

The Consumer Privacy Legislation Forum has been formed by twelve companies that believe the perception of the Internet as an unsafe place for personal information has been increasing. Google, eBay, Microsoft, Sun Microsystems, Symantec, Oracle, Hewlett-Packard, and Intel joined other companies in signing off on a letter to Congress requesting a federal consumer privacy law.

"The time has come for a serious process to consider comprehensive harmonized federal privacy legislation to create a simplified, uniform but flexible legal framework," the statement said.

The group cited a survey conducted by the Cyber Security Industry Alliance, where 94 percent of respondents nationwide considered identity theft a serious problem. Only 24 percent believe businesses have sufficiently emphasized protecting information.

A Wall Street Journal report noted the testimony by eBay CEO Meg Whitman and H-P chief privacy officer Scott Taylor on Tuesday about the issue before the House Energy and Commerce Committee. Both called for a federal law to supercede state laws that require companies to comply with multiple legal requirements.

Whitman also called for Federal Trade Commission enforcement of such legislation, as well as taking a position against the right for consumers to pursue lawsuits against companies for security breaches. Those potential class-actions could be crippling to a company found to have inadequately protected personal data; Whitman said companies could be "brought to their knees" by such suits.

The House Committee seemed receptive to the idea of federal privacy legislation, the report said. Joe Barton (R-TX) said, "It is time now for a broader more comprehensive approach. Individual stop-gap measures are no longer enough."

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About the Author:
David Utter is a staff writer for WebProNews covering technology and business.

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