House Judiciary Subcommittee on Intellectual Property, Competition and the Internet Hearing
Jun 20, 2012 (Congressional Documents and Publications/ContentWorks via COMTEX) --
Chairman Smith: America's economic success has been built on innovation. Ten years ago there was no such thing as Facebook or Twitter. Just five years ago, there was no such thing as an iPhone or an app store. Today mobile apps number in the hundreds of thousands and are largely developed by individual innovators and small businesses.
As new technologies have emerged, like mobile apps, social media, online advertising and data analytics, the costs for new business entry have come down. But as new websites and apps are developed, companies must work to ensure that they maintain the trust of their customers. Trust is the essential element for consumers to adopt new apps or technologies.
When we hear about privacy breaches, like what happened when Google collected large amounts of private data over wi-fi networks, we have to be concerned.
With every over-collection of privacy data, the first excuse is that the engineers or programmers went beyond what they were told to do. That excuse may fly once, but ultimately it's neither the engineer's fault nor the programmers fault, it's the company's.
In the internet economy, online services are generally provided to consumers at little or no cost. And behind these online services are hundreds or thousands of employees and millions of dollars in hardware and equipment.
The internet economy runs on data. There is an implicit bargain between an Internet service and the consumer that includes an exchange of information or data, instead of cash.
When a consumer receives a free email account or cloud storage space, or uses a search engine, social media website or app, there is a collection of data that allows a company to construct their service and provide targeted advertising or related data analytics services to the consumer.
As Internet companies have developed new technologies, their privacy policies have had to evolve.
Many companies now institute privacy-by-design, where privacy protections are built directly into their software and hardware products from the beginning. Incorporation of the best practices for privacy is essential as new products are developed online.
For example, I have read that Google and Apple are building even more detailed maps that rival defense satellite imagery. Though this ensures that we will never get lost if we drive or walk through a new city, we also need to ensure that when images are taken in residential areas or in people's backyards that their privacy is protected.
This is another place where privacy concerns should not have to be raised by Congress or the media. They should be addressed before the products are even announced.
The growth in smartphone use and mobile apps has created an entirely new business sector, from Instagram, to new mobile apps for established online websites and companies.
This new business sector is composed mostly of small businesses and individual programmers. As we will hear from our witnesses today, many of these small businesses are just a couple of software programmers, not two programmers and a lawyer. And so they often need assistance from more established players as they work to incorporate privacy protections into their software.
The mobile and Internet playing field is broad, and the specific technological protections may be unique to particular technologies.
But as companies incorporate privacy protections into their services, it is important for them to provide privacy policies that are understandable and reasonable. This way it's clear to the consumer what the bargain is that they enter into when they use a website or mobile app.
I look forward to hearing from all of our witnesses. I hope their testimony allows the Subcommittee to learn how the technology industry works to incorporate balanced privacy protections that will inform and protect consumers.
Read this original document at: http://judiciary.house.gov/news/06192012.html
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