In a hearing by the House Subcommittees on Commerce, Trade, and Consumer Protection and Communications, Technology, and the Internet, lawmakers addressed both online and offline data collection, and questioned whether businesses are collecting too much data about consumers without their knowledge or consent.

"We have moved from an era of privacy keepers to privacy peepers and data mining reapers," Representative Ed. Markey (D-Mass.) said at a hearing about data collection. Markey reiterated prior statements that consumers should be able to opt out of behavioral targeting online. "They should have the right to say no," he said.

Witnesses at the hearing included privacy advocates Chris Hoofnagle of Berkeley Center of Law & Technology and Pam Dixon of the World Privacy Forum, as well as the ad group WPP.

Representative Rick Boucher (D-Va.), who is expected to introduce a privacy bill shortly, questioned whether legal protections could change people’s attitude toward behavioral targeting or tracking users’ Internet habits to deliver ads that are targeted to their preferences and interests. Referring to a recent study showing that two-thirds of Americans opposed tailored ads, Boucher asked Hoofnagle whether that percentage would drop if users had more control over the collection and use of their data.

But Hoofnagle said that new laws might not change people's attitudes because many consumers already mistakenly believe that sites with privacy policies are not permitted to share data. He also said the debate over whether to have consumers opt in or opt out of data collection was misplaced. In fact, he said, neither option protects consumers. "It is easy to trick people into opting in. It is easy to manipulate people into not opting out."
Instead, he said, companies should be limited in how long they could keep consumer data.

Representative Mike Doyle (D-Pa.) questioned whether data collection injures consumers. Describing a scenario in which a person who likes to ski is wrongly targeted as a fisherman and, as a result, receives ads related to fishing, he asked, "What's the harm?"

Dixon replied that some companies can use data for purposes that can have a negative impact on consumers. For instance, she said, some companies place people who dispute charges into "bad customer" databases. But she did not point to any particular harm caused by behavioral targeting.

Lawmakers also discussed how to balance the advantages of data collection against the importance of giving consumers control over information that companies collect. "The collection, use, and dissemination of consumer information provide many benefits to consumers, businesses, and the marketplace," Representative Henry Waxman (D-Calif.) said in a written statement. "But they raise legitimate concerns about whether consumers have adequate control over personal information that is shared."

Why it matters: For the last couple of years, online privacy – and behavioral targeting – have been perennial topics in Congress. However, with Democratic majorities in both houses and a Democratic president, there’s a greater likelihood that a privacy bill will make it into law sometime in the next few years. Companies with a stake in this issue should keep tabs on what is happening on the Hill in this area and do what they can to protect their interests.