Almost as soon as it hit the stands, America Online's decision to sell user phone numbers to telemarketers set off alarms of online privacy advocates.
And Thursday, the critics weren't impressed with the company's backpedaling - an announcement that the phone scheme was really all a big misunderstanding and that members have nothing to fear but calls from AOL itself.
Privacy activists said that despite the retreat, the company's proposed terms of service still contain disturbing implications. On its Web site, the Electronic Privacy Information Center notes that in its retraction, AOL said nothing about a policy allowing it to use "navigational and transactional information" - in other words, data about where users go when and what they do or buy there - to develop "member lists for companies with which AOL Inc. has a contractual marketing and online relationship."
"In some ways, the telephone issue has distracted people from the more troubling aspects of AOL's new policy - like the fact that they're compiling information on everything you do," said EPIC general counsel David Sobel.
With the Internet entering a phase when the need for commercial viability has eclipsed the early start-up frenzy, awareness of the new risks associated with the collection of online data has finally penetrated the musty halls of Congress. In January, Representative Bruce Vento (D-Minnesota) introduced the Consumer Internet Privacy Protection Act, which would require "servers to obtain the written consent of their subscribers before disclosing any of their personal information to third parties."
And just after the Federal Trade Commission finished hearings on ways to protect unwitting and unwilling consumers from the unwanted barrages of junk email and unannounced collection and resale of personal data, Representative Edward Markey (D-Massachusetts) introduced a similar bill, the Communications Privacy and Consumer Empowerment Act.
The bills came just as America Online began looking to diversify, moving from subscription-based earnings to income from advertising and electronic commerce. To that end, they partnered with companies such as Tel-Save Holdings, SportsLine USA, Amazon.com, 1-800-Flowers, and telemarketing giant CUC International.
Spokesman Richard d'Amato said privacy advocates are all heated up over nothing. And in fact, AOL's privacy policy explicitly states that the company "will not disclose to third parties navigational or transactional information ... except to comply with applicable law."
Still, Sobel believes companies' collection of data needs much deeper examination.
"Say you're a man involved in a custody dispute," says Sobel. "You've looked at porn sites, gone into gay chat rooms, whatever. That stuff could well be subpoenaed and come back to haunt you."
