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Tech Firms Fear Privacy Lawsuits

Written by David Utter for

A dozen high-powered companies inside and outside of the technology industry jointly requested Congress pass a law to protect the privacy of consumers, while insulating them from being “brought to their knees” by class-action lawsuits.

Efforts by Google and other technology companies to drum up support for federal privacy legislation appear to be motivated by a desire for protection from civil actions in the event of a privacy breach as much as ensuring Internet users keep using the Web for commerce.

The Consumer Privacy Legislation Forum has been formed by twelve companies that believe the perception of the Internet as an unsafe place for personal information has been increasing. Google, eBay, Microsoft, Sun Microsystems, Symantec, Oracle, Hewlett-Packard, and Intel joined other companies in signing off on a letter to Congress requesting a federal consumer privacy law.

“The time has come for a serious process to consider comprehensive harmonized federal privacy legislation to create a simplified, uniform but flexible legal framework,” the statement said.

The group cited a survey conducted by the Cyber Security Industry Alliance, where 94 percent of respondents nationwide considered identity theft a serious problem. Only 24 percent believe businesses have sufficiently emphasized protecting information.

A Wall Street Journal report noted the testimony by eBay CEO Meg Whitman and H-P chief privacy officer Scott Taylor on Tuesday about the issue before the House Energy and Commerce Committee. Both called for a federal law to supercede state laws that require companies to comply with multiple legal requirements.

Whitman also called for Federal Trade Commission enforcement of such legislation, as well as taking a position against the right for consumers to pursue lawsuits against companies for security breaches. Those potential class-actions could be crippling to a company found to have inadequately protected personal data; Whitman said companies could be “brought to their knees” by such suits.

The House Committee seemed receptive to the idea of federal privacy legislation, the report said. Joe Barton (R-TX) said, “It is time now for a broader more comprehensive approach. Individual stop-gap measures are not longer enough.”

About the Author:
David is a staff writer for WebProNews covering technology and business.

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Camilla Todd
Camilla Todd is Head of Digital Marketing at WNW Digital and manages Search Engine Optimisation, PPC, Social Media campaigns and Brand Awareness for WNW Digital SEO clients. You can follow her on Twitter @camilla_wnw, email her at or phone on 01392 349580

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