"It looked like online privacy legislation was dead, but now I'd say there's a 75% chance that a bill will pass," says Giga Information Group analyst James Grady. "The Republicans really appreciate how delicate their balance of power was--and now they'll have to be much more conciliatory, and look for legislation that both sides can support."
That's not to say that a blatant case of misuse of private information might not spur both sides of the Hill into passing a bill with some real teeth in it. A few more cases like Amazon--which recently got a green light from the Federal Trade Commission to change its policy in midstream and insert the right to sell its data--could cause a consumer backlash.
But Reed Freeman, an attorney at the Washington law firm of Collier, Shannon, and Scott, sees a bigger shift coming. While new Commerce Committee chairman Ernest "Fritz" Hollings (D-S.C.) doesn't have the power to push a bill through, he does have the power to stop one--and Hollings is in favor of an opt-in regime. "That's a sea-change in policy, and one that spells trouble for a McCain-type opt-out paradigm, making it through the committee," Freeman says. But even if it does, he acknowledges that it will never pass the Republican-controlled House Commerce Committee, under chairman Billy Tauzin (R-La.).
With Congress not yet confident that it understands the issues involved in E-commerce, it's not likely to impose the huge cost of opt-in programs on Internet businesses. Freeman is betting this summer will bring a congressional commission charged with looking into the cost of privacy protection, rather than legislation. "That's a consumer-friendly initiative everyone can get behind with a straight face, and it's got a groundswell of support," he says. "I'm thinking a privacy commission has the best chance, no legislation has the second-best chance, opt-out is third, and opt-in is simply not happening."