• by Wendy Davis  @wendyndavis, August 5, 2010

Two senior lawmakers are questioning AOL, Yahoo, MSN and other Web companies about their practice of allowing third-party ad companies to install cookies and other tracking mechanisms on visitors' computers.

In letters to the companies, Reps. Ed Markey (D-Mass.) and Joe Barton (R-Texas) said they were troubled by the notion "that the price of consumers' daily use of the Internet increasingly is surrender of their personal information." The legislators' move comes in response to a recent Wall Street Journal report that the top 50 U.S. Web sites installed an average of 64 pieces of tracking technology -- like cookies or beacons -- onto users' computers.

Web companies often say that such tracking is anonymous, but privacy advocates worry that individuals can be identified if the information that's gathered is sufficiently detailed. Markey and Barton said in their letter that the online data collection now underway "permits web-based enterprises to develop digital dossiers on consumers for a range of purposes, including highly targeted marketing."

They asked the Web sites a host of questions, including how information about users is collected, whether such information is monetized, and if so, how much revenue was associated with that information in the last 12 months.

The letter also asked the sites to provide the names of all ad and analytics companies that have access to visitors' data. The lawmakers also questioned the Web sites about their privacy policies, asking whether consumers are notified about the array of companies that collect data.

The 15 sites to receive letters were Dictionary.com, MSN.com, Comcast.net, AOL.com, Merriam-Webster.com, Photobucket.com, Answers.com; Careerbuilder.com; MSNBC.com, Live.com, Myspace.com, Yahoo.com, Verizonwireless.com, Yp.com, and About.com.

A Verizon Wireless spokesperson said the company was reviewing the request and would get back to Congress.

A Microsoft spokesperson said in a statement that the company "takes seriously our responsibility to protect people's privacy when they are using Microsoft's products and services." The spokesperson added: "We look forward to reviewing the letter and continuing to work with Representatives Markey and Barton on this important issue."

A third company said it had not yet received the letter.

Separately, a coalition of privacy advocates including the Center for Digital Democracy and U.S. Public Interest Research Group asked lawmakers to investigate a report in The Wall Street Journal stating that Microsoft lessened privacy protections in the latest version of its browser in response to concerns raised by the ad industry. The original plan reportedly was to have a setting that automatically rejected tracking technology. Instead, while the browser allows consumers to reject tracking technology, people must activate that setting anew each time they launch the software.

"Microsoft's self-serving action is emblematic of the ad industry's failure to enact meaningful self-regulation," the advocates state in letters sent to Reps. Barton and Waxman (D-Calif.) as well as Sens. Jay Rockefeller (D-W.Va.) and Kay Bailey Hutchison (R-Texas).

Lawmakers currently are mulling two proposals for privacy legislation -- a bill introduced last month by Rep. Bobby Rush (D-Ill.) and a draft proposal floated earlier this year by Rep. Rick Boucher (D-Va.).