Google, Facebook defensive as debate begins on bill updating online privacy rules

In the wake of a series of privacy missteps by Google, Facebook and other companies, a growing chorus on Capitol Hill is calling for major online privacy legislation and Silicon Valley companies are girding for the battle.

Politicians in Washington, D.C., say they are increasingly concerned about how tech companies' treatment of personal data could infringe on constituents' online privacy.

Even as Congress begins to debate a controversial bill intended to update online privacy rules, a constant drip of headlines this spring about privacy problems affecting Google, Facebook and, now, Apple, has caused several congressional committees, the Obama administration and members of Congress from both political parties to home in on the issue.

"While privacy concerns have ebbed and flowed, I think it is fair to say that they are at an all-time high now," said Jim Dempsey, vice president for public policy at the Center for Democracy & Technology, a D.C.-based nonprofit that works to protect both Internet innovation and privacy.

Issue intensifies

The conflict only intensified recently after Google delivered a detailed response to the House Commerce Committee, denying that the company broke U.S. law when it inadvertently scooped up data from unsecured Wi-Fi networks as its Street View cars drove past private homes and businesses.

That did not satisfy U.S. Rep. Joe Barton, R-Texas, co-chairman of the House Privacy Caucus, who called for hearings.

The chairman of the House Judiciary Committee, Rep. John Conyers, D-Mich., asked both Google and Facebook for a broader explanation of their privacy practices.

The Federal Communications Commission in a recent post on its official blog highlighted the security loophole that allowed the e-mail addresses of 114,000 users of Apple's new iPad to become accessible.

"Google's behavior also raises important concerns," wrote Joel Gurin, who heads FCC's Consumer and Governmental Affairs Bureau. "Whether intentional or not, collecting information sent over Wi-Fi networks clearly infringes on consumer privacy."

The bill before Congress now would determine how Internet companies could collect personal data, and what warnings they would have to give to consumers.

Spending on lobbying

Hoping to tell their side of the story, executives with Facebook and Google have been meeting with members of Congress. Google has boosted its spending on lobbying and contributions to federal candidates, and plans to continue to expand its presence in D.C., said Alan Davidson, Google's director of public policy for the Americas.

In 2009, Google spent about $4 million on its lobbying efforts, up from $260,000 in 2005, according to U.S. Senate records. By the end of the first quarter of 2010, Google had already spent $182,800, nearly two-thirds of what it spent during the entire 2008 election cycle, in contributions to congressional candidates, according to federal data collected by OpenSecrets.org.

"We're growing in Washington because we find our company and our industry is increasingly in the center of important debates about the future of the Internet," Davidson said. "We want to be a constructive part of those debates."

Even Twitter, which just hit its 200th employee, is hiring its first representative in D.C.

The employee will not be a registered lobbyist, but an unofficial ambassador to help politicians understand the microblogging service, said Sean Garrett, a Twitter spokesman.

"We view communication between us and Washington officials as being a necessary part of a business where you touch millions of people," Garrett said.

Privacy advocates say tech companies, by using people's demographic data and online histories as the currency that pays for online services through targeted advertising, is causing the conflict with Washington.

"I think it is part of the shifting directions of Facebook and Google," said Marc Rotenberg, of the Electronic Privacy Information Center. "Silicon Valley has now gotten itself mired deeply in privacy-related business models. I think that's what Washington is reacting to."

Fears of stringent rules

Not everyone sees it that way. Internet-industry advocates warn that D.C. could strangle the golden goose of innovation with overly stringent privacy regulations.

The interest is because "professional privacy critics are generating the noise and the calls for legislation," said Steve DelBianco of NetChoice, a confederation of Internet companies and trade groups. DelBianco sees a cultural conflict between the valley's innovate-or-die mindset and D.C.'s love of the status quo.

Laws may be needed

But even members of Congress who represent Silicon Valley and say the ability of Internet companies to innovate must be protected — including Democratic Reps. Zoe Lofgren and Anna Eshoo — also say their constituents are concerned about their online privacy, and that hearings and privacy legislation may be necessary.

According to a joint poll by the University of California, Berkeley, and the University of Pennsylvania, 55 percent of adults were more concerned about online privacy than they were five years ago and just 6 percent were less concerned.

"People are very concerned about their data," said Joseph Turow, a professor at Penn's Annenberg School for Communication who worked on the poll, "but the way the world is today, you have to go online."