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May 24, 2000

Assembly sets hearing on privacy issues; Council plans to testify

The Business Council plans to testify at a hearing that the Assembly will conduct June 7 on the privacy interests of individuals who conduct business on the Internet.

The hearing will take place at 10 a.m. in Hearing Room C of the Legislative Office Building in Albany. It is being sponsored by the Committee on Consumer Affairs and Protection, the Committee on Oversight, Analysis and Investigation, and the Assembly Legislative Commission on Science and Technology.

The public hearing will focus on "policy options for limiting the manner in which consumer personal information is accumulated, disseminated, and used without the knowledge of the consumer," the Assembly's hearing notice said.

"The Committees and Commission also recognize that the exchange of information can be a legitimate business transaction and that prohibiting such transactions may have serious consequences for New York State businesses," the hearing notice added.

The business perspective on privacy protection: Representatives of The Business Council will testify "to ensure that policymakers understand why information-gathering is a legitimate and essential part of electronic commerce that benefits both consumers and businesses," said Ed Reinfurt, vice president of The Business Council.

Reinfurt noted that The Business Council is reviewing numerous privacy-related bills that have been introduced in Albany this year, and is committed to working with their sponsors to ensure that they balance consumers' privacy interests with the legitimate needs of electronic commerce.

"It is in industry's interests to ensure customer satisfaction, and to build and sustain trust with the information gathered from commercial transactions," Reinfurt noted. "That's true whether you're selling personal health products at a local drug store or high-tech gadgets on the Internet.

"Because businesses that sell on line have this strong interest in protecting their customers, we believe that state policymakers should encourage industry self-regulation as a cornerstone of the protection of on-line consumers."

Less effective approaches to privacy protection are those that would impose costly government restrictions on electronic commerce, that inadvertently reach far beyond electronic commerce to affect many older and more established types of transactions, and that will become outdated or irrelevant as technology evolves, Reinfurt said.

"The Business Council believes that, where government intervention is needed to facilitate e-commerce, its goal should be to promote investment, enhance competition, protect intellectual property, prevent and punish fraud, and encourage the proper mix of rules and self-regulation, while supporting the growth of commercial activity on line," he added.

The Business Council's recent activities on privacy: Reinfurt noted that The Business Council has been working closely with New York State Attorney General Eliot Spitzer and the Senate and Assembly task forces on privacy-related policy issues. For example, The Council has been strongly urging its members and all businesses to develop and prominently post on their websites privacy policies that spell out how businesses will use information provided voluntarily by consumers as an essential part of electronic transactions.

Policies that reflect the guidelines promulgated by the Online Privacy Alliance are recommended, he said.

Good privacy policies emphasize several elements, Reinfurt noted:

Such policies must at the time time sustain First Amendment protections of the flow on both personal and business speech and information, Reinfurt added.