A hitherto low profile alliance of new media titans yesterday moved into the spotlight to launch a campaign aimed at stifling online privacy legislation.

Alarmed by the raft of privacy bills currently before Congress and state legislatures across the nation, the Washington-based Online Privacy Alliance has launched a three-pronged attack on the bills, alleging that these will cost Joe Public billions of dollars annually.

Led by the Direct Marketing Association, OPA members (among them AT&T, AOL Time Warner, BellSouth, IBM, Microsoft and Sun Microsystems) are armed with four industry-funded studies which claim that the upcoming legislation is flawed on three counts.

Firstly on grounds of imposing expensive regulatory burdens. (2) Uncertainty as to how any US internet law would apply to non-internet industries. (3) New technology rather than legal constraint is a more effective guardian of public privacy.

Of greatest concern to OPA members is the broad public support for online-privacy protection which has led to a proliferation of state privacy laws. Says Michael Turner of the Information Services Executive Council, which produced one of the DMA-commissioned studies: “There is a real fear that some politician riding his horse is going to say, 'I'm going to tell my constituents that I'm protecting their privacy’.”

Although none of the privacy bills currently passing through Congress appears to be making progress, OPA is concerned that any major internet privacy breach could jump-start legislation.

Pro-privacy campaigners argue that politicians are under immense public pressure to legislate. “Privacy,” says Marc Rotenberg of the Electronic Privacy Information Center, “is not an issue on the radar screen. It is the radar screen.” Commenting on the apparent lack of legislative progress, Rotenberg added: “It's hard to imagine that Congress is not going to act on the privacy issue ... [but] I don't think anyone expected a bill to be flying to the floor at this point.”

The studies, released yesterday, claim that proposals to limit online companies from sharing or selling customer information without permission would cost ninety of the largest financial institutions $17 billion a year in added expenses, resulting in a $1 billion ‘information tax’ on consumers through costs tacked onto products from catalogs and internet retailers.

They also contend that if an internet retailer can't verify address information with a credit company, fraud becomes harder to police. More rigorous privacy rules would lead to increased risk of fraud and identity theft, with the knock-on effect of restricting availability of consumer credit.

News source: Wall Street Journal