HP's Fiorina backs Net regulation

Putting her company at odds with other industry leaders, Fiorina calls for regulators to step in with privacy standards.
Written by Ben Charny, Contributor
ASPEN, Colo. -- Hewlett-Packard Co. CEO Carly Fiorina has put her $50 billion company in a rather lonely, and precarious, position.

The woman at the helm of one of the computer industry's oldest citizens wants some form of legislation to help answer the growing concerns over Internet privacy.

"It cannot be every man, woman and child out for themselves in the wild, wild west," she told a group of high-powered policy makers and industry leaders attending the Progress and Freedom Foundation's Aspen Summit.

"There is a role for legislation that sets a minimum set of requirements to create a foundation that is minimally acceptable," she said.

The crowded room stood and cheered her remarks, and those attending a dinner where she spoke fawned over her leadership role. One industry leader went so far as to call her the leader of the new digital age.

Under Fiorina's leadership, HP (hwp) has been trying to coax a reluctant industry for more than two months to get behind some form of federal regulation. The issue is so divisive that sources say even those at HP are divided on which direction to go.

The company is championing a law forcing Web sites dealing with consumers to disclose up front what they plan to do with the information gathered from every Web site visit. Scott Cooper, HP's technology policy manager, said congressmen will be getting more visits from HP in the next few weeks.

"We will be active in trying to engage Congress in the need to have legislation along these lines," including supporting the current bill introduced by Sen. John McCain, R-Ariz., he said.

But behind the fawning in Aspen is a real division between Hewlett-Packard and the rest of the IT industry.

Even Fiorina admits it's been tough getting other companies to come on board.

"We have seen some movement," she said following her address Tuesday night.

So far, most of the fans seem to be those in government, or people like Esther Dyson, the head of ICANN (Internet Corporation for Assigned Names and Numbers) who will be stepping down in November.

"Government and industry can do a lot more," she said.

But fans of HP's stance are hard to find in the information technology industry. Instead, major players like Microsoft Corp. and IBM Corp. are moving more towards self-regulation.

Microsoft (msft), along with American Express, AT&T (T), Citigroup and Prudential Insurance, all have hired privacy officers whose job it is to protect the data collected online.

DoubleClick (dclk) has one too: Jules Polenetsky, the former New York City Consumer Affairs Commissioner, came on board after DoubleClick bought an offline marketing firm.

Consumer advocates said the coupling of an online advertising company with an offline-marketing firm created a monster of information at DoubleClick's disposal.

Polenetsky is a fan of a set of standards reached by the Web advertising industry earlier this year. The same rules have the approval of the White House and the Department of Commerce.

"The self-regulatory agreement is strong," he told a group of executives attending a working dinner at the forum where Fiorina spoke.

In fact, last year almost 88 percent of all Web sites that deal with consumers were posting their privacy policies, said Federal Trade Commissioner Orson Swindle.

That is up from 14 percent less than five years ago.

"Yet, there was no legislation," Swindle said.

Michael Turner, the director of The Information Services Executive Council, said self-regulation coupled with educating the consumer about what a company actually does with profile information will do more than law.

The council is studying the economic effect of some of the possible regulations being bandied about.

Hewlett-Packard Co. (hwp) One proposal would force Web sites to ask for a consumer's permission before collecting their data. Currently, most make consumers opt-out of the profiling on their own.

A change would create a $1.8 billion loss for just the apparel industry alone, he said. Overall, the loss could top $400 billion, he said.

But for all the vinegary statements of doom, there are signs the industry may be beginning to soften its resistance.

Gary J. Shapiro, president of the Consumer Electronics Association, said federal regulation may be inevitable.

"At the end of this whole process there will be a law," he said.

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