Remarks of the Hon. William D. Daley
Secretary, U.S. Department of Commerce
Public Workshop on Online Profiling
Department of Commerce Building
1401 Constitution Ave., N.W.
Washington, D.C.
Monday, November 8, 1999
Good morning to all of you and welcome
to the Department of Commerce or, as some of us hope
it will be called in the next century, the Department
of e-Commerce.
Vice President Gore asked the Chairman and I to look
into the issue of profiling for our government. The
reason is, as we all know, in this e-world of ours
every time there is a new technology, along with all
the good it may bring, consumers also want to know
how it may affect their privacy. We saw that once
again last week. RealNetworks apologized and changed
its practices after the New York Times reported it
was gathering users' listening habits without notifying
them.
Obviously, Americans want to know what is happening
online behind their screens when all these targeted
ads pop up in front of them. The ads themselves obviously
can be good.
As a consumer, if I'm online and one site has figured
out that I like golf courses, possibly in or around
Chicago, and I get this banner ad about a great golf
weekend, that is good. But if someone has been sneaking
around me, following every click I make at every site,
and they share this information behind my back without
my knowing it, then I, I believe like most consumers,
would be rather unhappy.
The reason people have the gut reaction they do to
profiling is that they don't know what is being collected
about them, they don't have choices, and this is not
good for developing consumer confidence.
As Commerce Secretary, I can tell you that we are
holding this workshop to find the facts, to see the
great things that profiling can do to help consumers
and companies, and companies target their online advertising
and their marketing.
We very much appreciate the efforts of all of you
to be here to help educate all of us. Obviously, we
will all be wrestling with some extremely difficult
issues. I see this as an opportunity to learn about
the technology that is behind profiling. I see this
as an opportunity for privacy advocates to help raise
awareness about these issues which are so important
to the consumers. And I see this as a chance to show
us why industry leadership will be better off than
Washington intervention.
In 1997, when the Internet had about one-third as
many people as are connected today, the President
and Vice President put forward our government's first
policy and just about any government in the world's
policy on e-commerce. They wanted the privacy sector
to lead and government not to do anything that would
mess up the Internet.
In our opinion, this has worked. The Chairman and
I have challenged the industry to lead on privacy,
and we were taken very seriously. The number of web
sites with privacy policies has greatly increased.
Many of the largest advertisers only place ads on
web sites that contain privacy policies. And the number
of companies that are signing up for seal programs,
like TRUSTe and BBB Online, continues to grow quickly.
Obviously, we all hope the same happens here.
I know some of you have been working on a new initiative
and from what we all hear you are definitely on the
right track, and you may have some announcements later
on today. We all look forward to hearing them.
The fact is, as clever as industry has been to create
profiling technology, it has to be as clever in figuring
out how to respect consumers' choices. This morning
Al Westin will show in a survey the majority of Americans
are happy about receiving tailored ads. That obviously
will come as no surprise to any of us. Americans are
the greatest shoppers the world has ever seen, and
if someone has a bargain these shoppers definitely
want to hear about it.
But consumers also want to know what is going on inside
their computers. It is not Big Brother that the consumers
fear any more and it is not even big businesses that
they fear. They fear businesses that they have never
heard of having information about them and using it
for purposes that they don't even understand.
If a web firm fails to protect consumers' privacy,
if they fail to disclose, if they fail to give consumers
choice, I guarantee you that governments will be forced
to react. Because this technology knows no borders,
it is far better for the market to respond than for
governments, not only in this country but around the
world, to be taking unilateral action.
Let me draw a picture about how concerned the American
people are about privacy. This month we will launch
an ad campaign for the 2000 census. By mandate of
the Constitution, we have conducted a census every
ten years since George Washington was President. But
for the very first time, we need to run paid ads becausefewer
and fewer people are willing to fill out the survey.
If they do not mail it in, we literally have to hire
an army to knock on every home, every residence in
America, to get the information required by the Constitution.
The big reason people are hesitant about the census
is confidentiality and it is privacy. Americans are
afraid that we will do something with the information,
even though by law we cannot share this information
that is personally identifiable with any government
agency.
The point is -- and I will end on this -- privacy
is a very big deal for the American public. We see
it as essential for our freedom. But the benefits
of the Internet and profiling are enormous benefits
for companies. They can do a better job of offering
the right products to the right customers. They can
do it faster and they can do it cheaper.
No question, knowing their customer is extremely important
to every company in America, but so is listening to
your customers. And if they are telling you that they
want more information about profiling and more choices,
you need to meet those needs. If you do, we will have
the trillion dollar e-economy that will keep America
the envy of the world.
So I hope and I know that positive things will come
out of this workshop, and then we can report to the
American people that their privacy will be protected.
Once again, I thank you for joining us at this workshop,
and good luck to all of you today.