Good afternoon. I am Congressman Rush, Chairman of the
Subcommittee on Commerce, Trade, and Consumer Protection. It does
me great honor to welcome all of you to our joint hearing, Exploring the
Offline and Online Collection and Use of Consumer Protection.
The collection and use of personal information of customers and
consumers are threads from the same knitting needle, sewn into the
fabric of American commerce and competition near the start of the 20th
century. Accordingly, these tools and methods predate their more
powerful, precise, and predictive counterparts in the online realm by
more than 100 years.
But, just because something has been around for a long time, does
not mean we understand as much about it as we should. That is why I
am delighted about today's hearing. It is the fourth in a series of
hearings our two subcommittees have held on the subject of privacy.
At our hearings and in meetings, consumers and their advocates,
industry, and leading commentators have shared with us extensively
why this all matters, how entrepreneurs and businesses go about
protecting consumer privacy, and why collecting personal information
about individual consumers improves the chances their businesses will
have to succeed. While preparing for these hearings, we have been
surprised at times how little is really known about how businesses go
about ensuring that individuals' privacy is protected.
Consumers are telling us they want to know more about how their
information is being protected. As their Representatives and as
consumers ourselves, we hear them loud and clear. They should be, and
are concerned...even angered when they learn they've been placed on
consumer lists identifying them as an affluent Jew or Black, a pro-choice
or pro-life donor, a member of a same-sex couple relationship, or being
addicted to gambling, sex or tobacco.
On my way back home to Chicago to celebrate the Thanksgiving
holidays, I could take the Metro to the airport and by using a SmartCard
and a frequent flyer card, records of my whereabouts, and when and to
where I was commuting and flying are created. To buy my holiday
turkey, I may use my grocery rewards card, which would swipe into a
system of databases what is in my cart, when and where I shopped, and
how much I paid, among other data points. These are just several
examples of the types of consumer lists and data points that are
generated and populated into databases, 365 days of every year.
But, how much do we know about the businesses that make it a
business of obtaining and selling or sharing "off-line" information and
customer lists with affiliated and unaffiliated businesses? How much do
we know about their marketing practices and product development
strategies to persuade buyers and individuals who will pay considerable
amounts of money for that information? How much do we know about
what these buyers and individuals do with that information, including
reselling that information downstream to other buyers and bidders for
I am also interested in hearing everyone's perspectives about the
current legal and regulatory structure that exists to protect this
information. Should the source of the information, whether it is taken
"off-line" from a warranty registration card, or "on-line" from a social or
health networking site be treated differently, when it reveals
fundamentally the same personal information about an individual
consumer? And by treating the information differently, with a
heightened duty on business to protect "on-line" sources", for example,
are we setting perverse incentives and conditions for regulatory arbitrage
My end goal is to work with the Members of this Committee to
introduce privacy legislation, which protects consumers from privacy-
related harms, yet doesn't stifle responsible entrepreneurs and business
people from developing models and executing successful business and
marketing plans that are respectful of consumer privacy.
Keeping privacy protections that belong in the back office from
tumbling into crawl spaces UNDER the office will be a big part of our
challenge. In whatever bill we draft, we must work to ensure that the
accelerating convergence between "off-line" and "on-line" collection
and use does not outpace the demands of consumers for dignity and
decency in our dawning digital economy and markets.
With that, I yield back the balance of my time.