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Oakland company joins lobby fighting privacy rules
Wednesday, May 09, 2001 By Eve Modzelewski, Post-Gazette Staff Writer
Oakland-based software concern ComponentOne yesterday joined several companies lobbying in Washington, D.C., against potential Internet privacy laws that opponents believe could cost U.S. businesses up to $36 billion.
If the privacy rules are enacted, companies doing business online could have to pay an average $100,000 to make their Web operations compliant, according to a study released by the Association for Competitive Technology, an online industry lobby backed by Microsoft Corp.
"In our case, I'd say that's a conservative estimate," said Larry Krueger, director of sales for ComponentOne, a member of the lobby.
ComponentOne allows customers to download or purchase software from its Web site and gives them the option to "opt out" or withhold personal information about themselves. If they do provide information, that information is sold or given to software resellers and distributers.
The company's privacy policy is detailed on the Web site, but it would be very expensive for ComponentOne to comply with some of the more stringent regulations, Krueger said. Some of the rules would require that companies give customers access to all of the information amassed on them and to mandate tracking of any information that is passed along to other companies.
"We're a strong proponent of maintaining customer privacy," he said. "What we're concerned about, as business people, is the cost."
So far, the marketplace has been the main mechanism for dictating privacy regulations.
"Over time, the market tends to weed out companies that are not doing an appropriate job of policing the information they're giving out," Krueger said. What could help protect consumers is better education about what to look for in terms of privacy provisions on a Web site, he added.
Part of the incentive for federal regulation of Internet privacy is to protect consumers from misuse of their personal information and to avoid fragmentation that would result if individual states each created their own Internet privacy rules.
Economist Robert Hahn, who compiled the study for the lobby, said his findings about the potential cost of complying with the regulations were based on estimates from 17 companies in 10 states. He estimated that the proposed rules would affect 3.6 million Web sites that collect personal information from visitors.
"Regulation can have a huge impact on what is now a thriving industry," Krueger said. ComponentOne and other members of the lobby are asking legislators to look at the costs and benefits of the proposed laws before taking action.
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