Privacy as a competition issue was a focus at the Senate Commerce Committee’s hearing on online privacy Thursday.

Federal Trade Commission Chairman Jon Leibowitz said having privacy rules could help provide a level playing field between companies that have privacy policies and those who don’t.

Commissioner Maureen Ohlhausen said, however, said something to be cautious of is enacting privacy rules in a way that favors incumbent companies, which already have lots of data, compared to companies just starting up.

She told senators, “new restrictions may also have an effect on competition by favoring entrenched entities that already have consumer information over new entrants who need to obtain such information, or encouraging industry consolidation for purposes of sharing data.  As a competition agency, the FTC should be sensitive to these concerns as well.

Ohlhausen said she wanted to see what voluntary privacy measures companies are taking ahead of new regulations.

In a response to a question, Chairman Leibowitz also told senators that he is seeing  more companies using their privacy policies as a means of attracting users and competing against similar online services.

CCIA President & CEO Ed Black has said that privacy used as a competition point is a good thing because it allows Internet users choice when it comes to the often competing goals of privacy versus the abundance of free content and services.

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