U.S. House Bracing For Showdown Over Internet Privacy

The U.S. House of Representatives Judiciary and Commerce Committees are gathering their troops for a showdown on the House floor over competing bills to control the use of online databases and other information stored on the Internet.

Rep. Howard Coble’s (R-North Carolina) “Collections of Information Antipiracy Act” is set to square off against Rep. Tom Bliley’s (R-Virginia) “Consumer and Investor Access to Information Act.” Bliley’s bill, however, is backed by more than five dozen Internet and intellectual property heavyweights, including Yahoo!, MCI Worldcom, DLJ Direct, Inc. and Amazon.

Coble’s bill would amend federal copyright law to make it illegal to use for commercial purposes “a substantial part of a collection of information gathered or maintained by another person through the investment of substantial resources” to compete directly for customers or business with the person who compiled the database.

Information can be used for non-profit educational, scientific or research purposes, but that information may not be sold or used in any commercial way as a substitute for the full database from which the information was extracted. It would pre-empt all state laws dealing with these issues and allow both civil and criminal complaints against violators.

Protection Against Duplication

Bliley’s “Consumer and Investor Access to Information Act” also seeks to give database compilers an enforcement tool to protect the work they do. In addition to contract and copyright protections available under existing law, the bill would prohibit the sale or distribution of any database that duplicates another database.

The law excludes news and sports information, law enforcement and intelligence information, scientific, education and research data, government databases, Internet communications databases, computer programs, subscriber lists, databases of legal materials and certain securities’ market data.

The bill also puts the Federal Trade Commission in charge of enforcing the rules and reporting to Congress on the effect the measure has on electronic commerce and the database industry.

Uncertain Future

While the language of both bills is similar and broad, industry observers agree that their impact will be felt most significantly in electronic commerce and Internet business, where online search services, consumer data and market research have become staples of online marketing strategies.

Bliley, however, argues that his bill will put less constraints on the use of such databases for commerce. In a letter to Capitol Hill colleagues this week, Bliley and Rep. Mike Oxley (R-Ohio) urged members of Congress to drop the Coble bill from the current calendar, and argued that the measure “could stifle the development of a robust electronic commerce marketplace.”

Although the bills are on the calendar for a vote, the House is not likely to take them up before next year. Congress is currently working overtime to pass the last couple of appropriations bills for fiscal year 2000, and are expected to adjourn the minute the last one is signed by President Clinton.

If so, Coble’s and Bliley’s bills would be eligible to come up for vote when Congress returns to session in January.

Ownership Issues

Noting that the rise of online shopping and investing has gone hand-in-hand with the development of online databases that allow file and Web page searches, Bliley argues that the facts included in such databases — “the building blocks of all information products — cannot be owned.” Coble’s bill “would create a quasi-property right in facts themselves, granting the compiler of information an unprecedented right to control value-added, downstream uses of the resulting collection. This would significantly chill the free flow of information that has dramatically benefited business, investors and consumers,” Bliley said.

Coble has not commented publicly on the competing bills.

In addition to major online retailers, Bliley said that organizations as diverse as the U.S. Chamber of Commerce, the American Library Association and the American Association for the Advancement of Science oppose Coble’s bill and support Bliley’s.

As Chairman of the House Commerce Committee, Bliley says that he is willing to consider Coble’s bill further, but any debate would require bumping the bill from the House vote calendar to send it back for more hearings.

Ironically, both the Commerce and Judiciary Committees had an eight-day period in early October to look at the other’s bill, but neither cleared its calendar for the task. The bills were instead sent on to the full House for consideration.

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