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Thank you, Mr. Chairman for
calling this hearing. I understand that this will conclude the series of
education hearings you have held on privacy, so I also want to commend you for
developing a process that allows us to consider this issue in a thoughtful and
deliberative manner.
The topic of today’s hearing is
very important in the overall privacy debate. Too often in Washington we are
told how it works in the real world through the eyes of Washington-based trade
associations, lobbyists and consumer groups. Today’s witnesses will provide a
different perspective—from the real world. I appreciate their willingness to
come forward and share their knowledge and experience.
As Chairman of the Committee, and
as a consumer, I have heard and seen a great deal of activity by American
companies. Let me sum up what they tell me: they like to exploit consumers for
all their worth, they know consumers don’t care about product quality, they
don’t try to maintain good customer relations, they can always find new
customers to replace dissatisfied customers, they don’t think that their brand
name is that important, and they don’t care about consumer privacy. I joke for
purposes of making a point – Companies Do Care About Consumer Relations.
The litany of untruths I just rattled off is comple tely opposite from what I
have experienced from American business.
In our market economy,
competition compels companies to strive to meet consumer needs. If a company
doesn’t do what customers want, they’ll go elsewhere. People sometimes seem
to forget this. Yet, it is a fundamental fact of commerce that service to the
consumer is the cornerstone of a successful company.
Privacy is becoming a factor that
consumers take into account as they shop. It may not be the primary concern, but
it is a factor. Many companies have recognized this and have responded in kind
with improved privacy practices. In fact, many of the privacy requirements that
some want mandated by Washington are already being implemented by reputable
companies. It is simply sound business practice to do so.
Some companies even use their
privacy practices to gain competitive marketing advantage over competitors. IBM,
for instance, recently plastered a picture of their privacy guru, who is here
with us today, in countless advertisements. Obviously, they see a positive side
to the privacy debate.
So, it is instructive to examine
just how real companies are dealing with privacy in the real world. We need to
learn how established leaders in the American economy (and often the
trend-setters) collect customer information, what the information is used for,
and how companies handle consumer privacy. I hope the panelists will enlighten
us on these points.
I also hope that this hearing
will help debunk the scary scenarios that have been created to stir up consumer
angst. Over the past few years, we have heard a lot of crazy stories about how
consumer information is used. Many of these stories have proved to be false.
Furthermore, I am pleased to see
a discussion of the practices of the so-called data aggregators. Most people
have had experience with the credit ratings services of some of these companies,
but they often offer many other services. It is important to demystify just how
they operate and what they do.
I note that one of the benefits
of data aggregators is of direct benefit to consumer needs -- the reduction of
junk mail. If you have ever received a catalog addressed to you that you have
completely no interest in then you know firsthand the results of poor
information. The accurate information provided by aggregators helps companies
offer consumers the products and services they will find useful. Of course, many
people have questioned the privacy practices of data aggregators and so here is
a chance to set the record straight.
Going forward, one thing should
be clear: I don’t see a need to legislate on false scenarios. We cannot and
will not design some elaborate new privacy regime that will take into account
every possible daydream of how information could be used. Reality must be
taken into account. We will look to all parties to keep this in mind as we
proceed in this debate.
I thank the Chairman and appreciate his
indulgence.
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