Copyright 1999 Federal News Service, Inc.
Federal News Service
APRIL 21, 1999, WEDNESDAY
SECTION: IN THE NEWS
LENGTH:
2150 words
HEADLINE: PREPARED TESTIMONY OF
KATHERINE BORSECNIK,
SENIOR VICE PRESIDENT
STRATEGIC BUSINESSES
AMERICA ONLINE, INC.
BEFORE THE SENATE JUDICIARY COMMITTEE
BODY:
Chairman Hatch, Senator Leahy, and
Members of the Committee, I would like to thank you, on behalf of America
Online, for the opportunity to discuss online privacy with you today. I am the
Senior Vice President for Strategic Businesses at AOL, and in that capacity a
significant amount of my work for the company is devoted to addressing issues of
online privacy, security, and data protection.
The online medium is quickly
revolutionizing the way we learn, communicate, and do business. People are
migrating to the Internet to meet their commerce and communications needs at an
extraordinary rate because it is convenient and fast, and offers an ever-growing
selection of information, goods and services. AOL subscribers can sign on to our
service and do research, shop for clothes, and buy airline tickets all in a
matter of minutes.
In addition, the online environment offers users unique
benefits of customization and personalization. Consumers can communicate
specific preferences online that will allow them to receive information targeted
to their own interests. For instance, AOL members can set their online
preferences to get the weather forecast for their own zip code, read news
stories about their own hometown, or receive notices about special discounts on
their favorite CDs. No other commercial or educational medium has ever afforded
such tremendous potential for personalization.But the power of the Internet can
only be fully realized if consumers feel confident that their privacy is
properly protected when they take advantage of these benefits. We know very well
that if consumers do not feel secure online, they will not engage in online
commerce or communication -- and without this confidence, our business cannot
grow. For AOL, therefore, protecting our members' privacy is essential to
earning their trust, and this trust is in turn essential to building the online
medium. We learned this important lesson through our own mistakes not too long
ago, when an AOL employee wrongly revealed the screen name of one of our members
to the government.
Recognizing the importance of this issue, AOL has taken a
number of steps to create an environment where our members can be certain that
their personal information and their choices regarding the use of that
information are being respected: from creating and implementing our own privacy
policies and educating our members about them, to promoting best practices among
our business partners, to engaging in self-regulatory initiatives and
enforcement mechanisms that will raise the bar for all companies who do business
online.
Setting an Example
Building on the lessons we have learned and
the input we have received from our members, we have created privacy policies
that clearly explain to our users what information we collect, why we collect
it, and how they can exercise choice about the use and disclosure of that
information. To that end, the AOL privacy policy is organized around 8 core
principles:
(1) We do not read your private online communications (2) We do
not use any information about where you personally go on AOL or the Web, and we
do not give it out to others. (3) We do not give out your telephone number,
credit card information or screen names, unless you authorize us to do so. And
we give you the opportunity to correct your personal contact and billing
information at any time. (4) We may use information about the kinds of products
you buy from AOL to make other marketing offers to you, unless you tell us not
to. We do not give out this purchase data to others. (5) We give you choices
about how AOL uses your personal information. (6) We take extra steps to protect
the safety and privacy of children. (7) We use secure technology, privacy
protection controls and restrictions on employee access in order to safeguard
your personal information. (8) We will keep you informed, clearly and
prominently, about what we do with your personal information, and we will advise
you if we change our policy. We give consumers clear choices about how their
personal information is used, and we make sure that our users are well informed
about what those choices are. For instance, if an AOL subscriber decides that he
does not want to receive any targeted marketing notices from us based on his
personal information or preferences, he can simply check a box on our service
that will let us know not to use his data for this purpose. Because we know this
issue is so critically important to our members and users, we make every effort
to ensure that our privacy policies are clearly communicated to our customers
from the start of their online experience.
We also make sure that our
policies are well understood and properly implemented by our employees. We
require all employees to sign and agree to abide by our privacy policy, and we
provide our managers with training in how to ensure privacy compliance. We are
committed to using state-of-the-art technology to ensure that the choices
individuals make about their data online are honored.
Finally, we try to
keep users informed about the steps they can take to protect their own privacy
online. For instance, we emphasize to our members that they must be careful not
to give out their personal information unless they specifically know the entity
or person with whom they are dealing, and we encourage them to check to see
whether the sites they visit on the Web have posted privacy policies.
Protecting Children Online
AOL takes extra steps to protect the safety
and privacy of children online. One of our highest priorities has always been to
ensure that the children who use our service can enjoy a safe and rewarding
online experience, and we believe that privacy is a critical element of
children's online safety.
We have created a secure environment just for
children -- our "Kids Only" area -- where extra protections are in place to
ensure that our children are in the safest possible environment. In order to
safeguard kids' privacy, AOL does not collect personal
information from children without their parents' knowledge and consent,
and we carefully monitor all of the Kids Only chat rooms and message boards to
make sure that a child does not post personal information that could allow a
stranger to contact the child offline. Furthermore, through AOL's "parental
controls," our members are able to protect their children's privacy by setting
strict limits on whom their children may interact with online.
Because of
the unique concerns relating to child safety in the online environment, AOL
supported legislation in the 105th Congress to set baseline standards for
protecting kids' privacy online. We worked with Senator Bryan, the FTC, and key
industry and public interest groups to help bring the Child Online Privacy
Protection Act (COPPA) to fruition last year. We believe the enactment of this
bill was major step in the ongoing effort to make the Internet safe for
children.
Fostering Best Practices
In addition to
adopting and implementing our own policies, AOL is committed to fostering best
practices among our business partners and industry colleagues. One of the
strongest examples of this effort is our "Certified Merchant" program, through
which we work with our business partners to guarantee our members the highest
standards of privacy and customer satisfaction when they are within the AOL
environment. AOL carefully selects the merchants we allow in the program
(currently there are 152 participants), and requires all participants to adhere
to strict consumer protection standards and privacy policies. The Certified
Merchant principles are posted clearly in all of our online shopping areas,
thereby ensuring that both consumers and merchants have notice of the rules
involved and the details of the enforcement mechanisms, which help to foster
consumer trust and merchant responsiveness.
Here are the criteria that our
merchants have to meet in order to become certified and to display the America
Online Seal of Approval (some screen shots that show how these criteria appear
to subscribers on our service are attached to this testimony):
1. Post
complete details of their Customer Service policies, including: Contact
Information, Shipping Information, Returns Policies, and Money-Back Satisfaction
Guarantee Information.
2. Receive and respond to e-mails within one business
day of receipt.
3. Monitor online store to minimize/eliminate out-of-stock
merchandise available.
4. Receive orders electronically to process orders
within one business day of receipt.
5. Provide the customer with an order
confirmation within one business day of receipt.
6. Deliver all merchandise
in professional packaging. All packages should arrive undamaged, well packed,
and neat, barring any shipping disasters. 7. Ship the displayed product at the
price displayed without substituting.
8. Agree to abide by AOL's privacy
policy.
Through our Certified Merchant program, we commit to our members
that they will be satisfied with their online experience, and we have developed
a money-back guarantee program to dispel consumer concerns about shopping online
and increase consumer trust in this powerful new medium. We believe that these
high standards for consumer protection and fair information practices will help
bolster consumer confidence and encourage our members to engage in electronic
commerce.Helping to Promote Industry Efforts
The online industry as a whole
is taking positive steps toward protecting consumer privacy. In fact, to improve
industry's commitment to online privacy, AOL joined with other companies and
associations last year to form the Online Privacy Alliance (OPA), a group
dedicated to promoting privacy online.
Since we began our efforts just a few
months ago, the OPA has grown to include more than 85 recognized industry
leaders, and industry efforts to protect consumer privacy online have blossomed.
The OPA has worked hard to develop a set of core privacy principles - centered
around the key concepts of notice, choice, data security, and access - and its
members are committed to posting and implementing privacy policies that embody
these principles. Furthermore, the OPA is continuing to reach out to businesses
nationwide to explain the importance of protecting online privacy and posting
meaningful privacy policies.
We believe that the OPA member companies are
setting a new standard for online privacy, and that as consumers become more
aware of the choices available to them, the marketplace will begin to demand
robust privacy polices of all companies that do business online. But we also
understand the need for meaningful enforcement of self-regulation. That's why we
abide by the OPA requirement to participate in robust enforcement mechanisms
through our involvement in the TrustE and BBBOnline privacy seal programs. We
are key sponsors of both the TrustE and BBBOnline privacy seal programs, and
have worked closely with industry representatives and members of the academic
community to help formulate strict standards for seal eligibility.
The
Challenges Ahead
We believe that companies are responding to the increasing
marketplace demand for online privacy, and that the tremendous growth of e-
commerce reflects positive trends on a variety of consumer protection issues,
including privacy. But our work has only just begun. As technology makes it
easier for companies to collect and use personal information,
the adoption and implementation of robust privacy policies will
become even more important.
In part, we believe that technology holds the
key to ensuring a safe and secure online environment. As an online service
provider, we believe it is critical for us to be able to provide the most
sophisticated security technologies to our members so that they can take steps
to protect their own privacy online. That's why we will continue to advocate the
widespread availability and use of strong encryption, both in this country and
abroad.
The challenges that lie ahead will give us the chance to prove that
industry and government can work together to promote meaningful self- regulation
of online privacy. But ultimately, it is the consumer who will be the judge of
whether these efforts are adequate. Because no matter how extraordinary the
opportunities for electronic commerce may be, the marketplace will fail if we
cannot meet consumers' demands for privacy protection and gain their trust.
We at AOL are committed to doing our part to protecting personal privacy
online. Our customers demand it, and our business requires it -- but most
importantly, the growth and success of the online medium depend on it. We
appreciate the opportunity to discuss these important issues before the
Committee, and look forward to continuing to work with you on other matters
relating to the Internet and electronic commerce.
END
LOAD-DATE: April 22, 1999
