Senate chairman calls for 'Do Not Track' bill

WASHINGTON (AP) — Warning consumers that industry has failed to protect their privacy online, a top Senate Democrat said Wednesday that he will press legislation this year that would create a universal "Do Not Track" option for consumers and penalize companies that fail to honor it.

"The American people are smart," said Sen. Jay Rockefeller, D-W.Va., chairman of the Senate Commerce Committee. "They are going to figure this out. And as they figure this out, they better like what they see if the Internet is going to prosper."

Rockefeller's proposal could face an uphill battle in a divided Senate already consumed with immigration and the budget. But his comments put renewed pressure on an industry struggling desperately to escape regulation.

The online privacy debate has mostly stumped Congress and prompted a tempered reaction from the Obama administration, mindful of consumers' concerns but reluctant to crush a growing industry in a difficult economy. Last year, the White House unveiled a "Consumer Privacy Bill of Rights" calling on industry to give consumers more control over their personal information and suggesting Congress pass legislation to enforce it.

But while everyone agrees that people should be given a choice to opt out of data collection and online tracking, advertising businesses and privacy groups remain at odds over how to implement it. Much of the debate focuses on whether consumers should have to click an opt-out button, or if their browser should automatically do it for them.

Rockefeller said Wednesday that voluntary efforts by industry have fallen short because some online advertisers ignore consumer requests not to be tracked. His bill would subject businesses to penalties by the Federal Trade Commission if they do.

"I do not believe that companies with business models based on the collection and monetization of personal information will voluntarily stop those practices if it negatively impacts their profit margins," Rockefeller said.

Industry is pushing back. The Digital Advertising Alliance points to its Web-based icon program that links consumers to an opt-out site of participating advertisers. They say some 20 million people have visited their site and only 1 million of those consumers chose to opt out of all ad tracking. Testifying at the hearing, Mastria said he thinks the industry has "delivered basically in principle" what Rockefeller proposes through legislation.

"Consumers are very pragmatic people," Lou Mastria, managing director of the Digital Advertising Alliance, said in an interview this week. "They want free content. They understand there's a value exchange. And they're OK with it."

The Do Not Track proposal is part of a broader debate about online privacy that includes what sensitive data might be collected from a person's mobile device. Because a smartphone can divulge a person's location, the FTC warned in a recent report that detailed profiles of a person's movements can be collected over time and in surprising ways, revealing a person's habits and patterns and making them vulnerable to stalking or identity theft.

Some researchers also say they suspect retailers are engaging in "price discrimination" — the practice of setting a price based on personal data, such as the average home price in their area or a person's proximity to a competitor.

Another concern is that companies might determine a person's eligibility for certain products and services based on information collected online, potentially violating credit reporting and fair lending laws.

"I think there should be obligations for companies to tell you what information they have about you" and give you the opportunity to correct it, said Justin Brookman of the Center for Democracy and Technology.

Adam Thierer, a senior research fellow at George Mason University's Mercatus Center, told the Senate panel that he thinks many of the privacy concerns cited with data collection are worst-case scenarios that probably won't happen. In the end, he said, data collection is merely "creepy" and might not warrant legislation.

"I think a lot of my neighbors are creepy, but I don't think they're harmful," Thierer said.

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Ill. GOP Chairman Survives Latest Ouster Attempt

Illinois' GOP chairman emerged from another ouster attempt Saturday and said his party must be more welcoming of diversity and inclusive of people who disagree if it's going to grow and win future elections.

More conservative members of Illinois' Republican Party have been trying to oust Pat Brady for months, largely because he took a position in favor of gay marriage when a bill to legalize it was before the Legislature earlier this year. About 50 party members attended Saturday's meeting of the GOP's State Central Committee to ask that Brady step down or that the committee fire him.

After a tense, hourslong session, Brady remained as the party's chairman. He said the committee did not take a vote on whether to fire him during a closed-door meeting Saturday.

"I think there are people in the party who don't necessarily agree with me, but the point is .... we're a party that welcomes all ideas," Brady said. "You don't have to be exactly a platform Republican to be welcome in the party, and that's the direction we're taking the party."

Besides Brady's stance on gay marriage, his detractors also point to Republican losses at the polls in November. Illinois Democrats won veto-proof majorities in both chambers of the Legislature and picked up seats in Congress.

"We need a leader people can rally around," said Mark Stern, a GOP township committeeman from DuPage County. "Pat Brady chose to focus on things that that are divisive rather than the 80 percent of things we all agree on. That's not leadership."

Tensions mounted when the committee went into the closed-door session without first taking public comment and remained behind closed doors for several hours. At one point, people gathered in a hallway outside the meeting began yelling and chanting, "Throw him out."

Brady said after the meeting that he does not plan to seek another term after his expires next year and that the committee agreed Saturday to begin working on a succession plan. He said that plan was something the party needed to do and was not a compromise to appease committee members who wanted him gone.

Brady also survived an attempt last month by some committeemen to vote him out. That effort failed amid concerns that getting rid of Brady would reflect poorly on a party that's trying to appeal more to young voters and minorities by being more inclusive.

Brady has the support of the state's ranking Republican, U.S. Sen. Mark Kirk, who announced earlier this month he also supports same-sex marriage. Both men have said they don't believe government has a place in deciding who should marry.

Saturday's conflict erupted during a meeting to discuss a preliminary analysis of what went wrong in the 2012 election and what it will take to do better at the polls in the future.

The report is expected to mirror one released by the Republican National Committee last month, which concluded that the party must be more open-minded and do more outreach to Hispanics, African-Americans, women and young voters if they are to be successful in future elections.

Brady and State Central Committeeman Mike Bigger, who's heading up the Illinois analysis, also said the state party needs to upgrade its database of voter information and improve communication and mentoring opportunities within the party.

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Senate confirms Mary Jo White as SEC Chairman

By Sarah N. Lynch

WASHINGTON (Reuters) - The Senate on Monday confirmed former federal prosecutor Mary Jo White as the new head of the Securities and Exchange Commission, the agency tasked with policing Wall Street and writing new rules of the road for financial markets.

White received wide bipartisan support in the Senate thanks to her reputation as a tough former U.S. Attorney for the Southern District of New York, where she went after mobsters and terrorists.

White was nominated in January by President Barack Obama, roughly a month after SEC Chairman Mary Schapiro stepped down from the post.

She sailed through her March 12 confirmation hearing before the Senate Banking Committee, and received little opposition on March 19 when the panel voted 21-1 to send her confirmation to the full Senate.

White will be taking over the helm of the SEC at a critical time. The agency still has much work remaining as it seeks to finalize rules required by the 2010 Dodd-Frank Wall Street reform law, particularly in the areas of over-the-counter derivatives and credit-rating agencies.

The agency is also behind on completing capital-raising rules required by more recent legislation, the 2012 Jumpstart Our Business Startups (JOBS) Act, which relaxes certain securities regulations to help small businesses raise funds and go public.

The SEC has been stuck in a rut since Schapiro left in December, leaving the five-member panel divided between two Democrats and two Republicans.

Since then, the SEC has done little in the way of rulemaking.

What little criticism White has received so far has mostly been about her ties to Wall Street.

After working as a prosecutor, she became a partner at Debevoise & Plimpton where she represented high-profile clients including JPMorgan, former Bank of America CEO Ken Lewis, UBS and accounting giant Deloitte & Touche LLP.

Some, including Ohio Democrat Senator Sherrod Brown, have raised concerns that this "Wall Street bias" could harm the SEC, an agency that has been accused by some of striking weak settlements with Wall Street banks over their behavior during the 2007-2009 financial crisis.

Little is also known thus far about White's views on securities regulatory policy and how she will direct critical rule-makings including a controversial plan to reform the $2.6 trillion money market fund industry.

The Senate's vote on Monday only allows for White to fill out the remainder of Schapiro's term, which expires in June 2014.

Obama had nominated White to both fill out Schapiro's term and also to serve a full, five-year term at the helm of the SEC.

It is unclear exactly when the Senate will take a vote on the longer-term nomination, though some aides have said it will possibly come up later after Obama nominates two new commissioners to replace Elisse Walter and Troy Paredes.

Walter, a Democrat who is serving as SEC chairman until White takes over, is working past her expired term and can only stay until the end of the year.

Paredes, a Republican, is facing the end of his term this coming June.

(Reporting by Rachelle Younglai and Sarah N. Lynch; Editing by Sandra Maler)

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