Federal Privacy Bills Top Concern for Online Firms

NetChoice, a technology trade group advocating for hands-off Internet policies, today took aim at federal legislation and sent a warning shot to legislators to ‘tread cautiously’ when regulating the online economy in releasing their list of the top 10 federal and state legislative proposals Internet firms should worry about.

Topping the list this time around is federal online privacy legislation, specifically the “Best Practices Act of 2010,” that the group warns could ‘cripple the Internet by adding significant cost and regulatory burden.’

The Internet Advocates’ Watchlist for Ugly Laws (iAWFUL) was created by NetChoice in 2009 to identify the top ten pieces of state and federal legislation that pose the greatest threat to the Internet and e-commerce. This is the list’s second update for 2010, coming in response to new legislation seeking to regulate Internet commerce.

The group singles out the “Best Practices” legislation, sponsored by Reps. Rick Boucher (D-Va.) and Cliff Stearns (R-Fla.) for the regulations it would impose on small websites and startups, even those that collect limited personal information.

The group also opposes a proposal from Rep. Bobby Rush (D-Ill.) to create a “safe harbor” choice program for businesses, arguing none of the proposals go far enough in attempting to mitigate new regulatory burdens.

This marks only the second time a federal bill has been awarded the dubious top honor, the first instance coming last February when the then-recently passed financial reform bill topped the list.

A federal bill to expand the Streamlined Sales Tax (SST) also earns the group’s ire, landing in the number two spot. NetChoice says the bill, H.R. 5660, sponsored by Rep. William Delahunt (D-Mass.), would kill jobs by placing the roles of tax-collectors in the hands of out-of-state businesses.

Individual, state legislative proposals from California to Maryland round out the rest of the top 10 list, including a proposed new tax on downloads in Oklahoma and South Carolina and a California bill that would regulate data breach notification.

NetChoice membership includes Internet, retail and media powerhouses such as AOL, eBay, Yahoo!, Oracle, NewsCorp, IAC, Expedia, Electronic Retailing Association and Overstock.com.