FTC member says privacy concerns becoming 'hysteria'

Computerworld - CORONADO, CALIF. -- Business-to-business exchanges can expect little regulatory interference from the Federal Trade Commission -- at least for now, FTC Commissioner Thomas Leary told an audience of technology company executives today.

"We're a lot more relaxed than we were before," said Leary. "The legal issues are a lot less than we thought a year ago. I don't think we need to issue any special guidelines for B2B."

One reason for the laissez-faire attitude is that big industry B2B exchanges, such as the automotive industry's Covisint, haven't taken off the way many had originally expected, said Leary. In short, they have failed to garner a significant competitive edge over traditional B2B relationships, Leary explained in a speech at Boston-based The Delphi Group's Collaborative Commerce summit here.

Unlike previous technological innovations such as the telephone, B2B exchanges have no monopoly power, and the technology to create exchanges is widely available, Leary noted.

"I do not foresee any company getting insurmountable first-move advantage from e-commerce because the technology is so easy to duplicate," he said.

On the business-to-consumer front, Leary said he doesn't expect the FTC to impose any new privacy regulations, at least for now. "In my view, there's a new hysteria on this question of privacy. People are beating the drum, and my sense is that the average person has far more privacy today than a century ago."

For example, he said, a hundred years ago, if you lived in a small town, your neighbors knew everything about you. Today, especially in U.S. cities, you may never the know names of your next-door neighbors.

Leary acknowledged that companies can and do collect a sea of data on individual consumers, but "this hysteria [over privacy] is misplaced." Citing the example of grocery stores that collect purchasing data from customers who use discount cards, Leary said there will be so much data out there that companies won't be able to use it all in ways that hurt individual consumers.

He did concede, however, that medical and financial information may need special protection.

On the issue of global e-commerce, Leary said he anticipates that companies will go forward in the face of multiple and conflicting rules and regulations regarding privacy. "I think a lot of businesses, as a matter of business risk, will have to take a chance on some kind of prosecution by foreign governments."

Related stories:

• FTC official faults corporate privacy policies, May 7, 2001



• Today's privacy policies don't protect e-shoppers, advocate charges, April 24, 2001



• FTC gives go-ahead to auto industry exchange, Sept. 11, 2000



• U.S. model protects privacy, FTC commissioner says, April 7, 2000