Spring Legislative Roundup: Privacy, Spam, and Taxes

This spring, Capitol Hill has continued to push for stronger privacy legislation and more restrictions on unsolicited e-mail. And lawmakers haven’t forgotten that the Internet tax moratorium will expire in October, unless legislation is passed to extend it.

Privacy

Sen. William Nelson (D-FL) on March 1 introduced the Financial Institution Privacy Protection Act (S.450) and the Social Security Number Protection Act of 2001 (S.451). S.450 would require financial firms to obtain consumer consent before sharing medical and financial data with affiliates. S.451 seeks to ban the sale or purchase of Social Security numbers, and would establish civil and criminal penalties for violations.

Two weeks later, on March 14, Sen. Richard Shelby (R-AL) introduced the Freedom from Behavioral Profiling Act of 2001 (S.536). The bill, which has been referred to the Committee on Banking, Housing, and Urban Affairs, would prohibit financial institutions from disclosing consumer data for marketing nonfinancial products. The bill would also ban the institutions from disclosing the identity of customers without specific notice and written consent.

Spam

The House Energy and Commerce Committee on April 4 approved the Unsolicited Commercial Electronic Mail Act of 2001 (H.R.718), introduced by Rep. Heather Wilson (R-NM) on Feb. 14, but with an amendment seeking to ban language that requires direct marketers to determine an Internet service provider’s (ISP) spam policy before sending bulk e-mail.

Under the bill, if a marketer is warned against sending further bulk e-mails but does so anyway, the ISP may take legal action. In addition to requiring e-mail marketers to label their advertisements as such and provide valid e-mail and physical addresses for consumer opt-out, the bill also allows ISPs that ban spam to sue the senders for $500 a message, up to $50,000, for violating the ISPs’ spam policy. The bill allows consumers to sue spammers that violate its provisions, but it prohibits class-action lawsuits. (State attorneys general can bring legal action on behalf of consumers.) The House Judiciary Committee has until June 5 to review the bill.

Internet tax

As reported earlier (“As Web Tax Moratorium Runs Out, Confusion Grows,” April issue), Sen. Ron Wyden (R-CA) and Rep. Christopher Cox (R-CA) on Feb. 8 introduced the Internet Tax Nondiscrimination Act (S.288), which seeks to extend the current Internet tax moratorium (Public Law 105-277) until 2006 and would require states to simplify their tax systems.

The next month, on March 9, Sen. Byron Dorgan (D-ND) introduced his own Internet Tax Moratorium and Equity Act (S.512). Dorgan’s bill would extend the tax moratorium through 2005. But it would also permit states without uniform sales-tax and use-tax codes to force marketers without physical presence in that state to collect sales taxes on e-commerce.

–Compiled by Moira Cotlier from Direct Marketing Association data

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