SUMMARY The Video Software Dealers Association is the largest national trade association for retail home video dealers and video distributors. Its members operate some 20,000 of the 30,000 home video retail outlets in the country. EROL'S, Inc., is a suburban Washington, D.C.-based video sale and rental retail chain with 165 stores in nine states and the District of Columbia. VSDA and its members, including EROL'S, believe that the privacy of their customers' video records should be respected and preserved, except for very narrowly drawn statutory exemptions. That is VSDA's policy and we generally support legislative efforts to reinforce that policy, including the two bills before your subcommittees. We agree that there should be carefully drawn exceptions for disclosure in the case of customer consent, ordinary business practice, or a strong showing that it is essential in a law enforcement proceeding. It is our understanding that your committees will provide some guidance to the courts and to video retailers regarding the steps that retailers might take to safeguard record privacy. The pattern of requests for records, through subpoenas in criminal or civil proceedings and from journalistic inquiries, indicates the need for Congressional action. The trend toward increased efforts at disclosure puts Congress on notice about the serious potential for invasion of privacy and chilling of the exercise of First Amendment rights. Video dealers should not have to face potential liability for failure to comply with a subpoena, on the one hand, or lawsuits brought by customers because they have complied, on the other. The proposed legislation will strengthen the policy practiced by VSDA dealers of maintaining customer privacy, and thereby protect the free exercise of First Amendment rights. TESTIMONY OF VANS STEVENSON FOR THE VIDEO SOFTWARE DEALERS ASSOCIATION AND EROL'S, INC. BEFORE THE COMMITTEE ON COURTS, CIVIL LIBERTIES JUDICIARY COMMITTEE U.S. HOUSE OF REPRESENTATIVES AND THE SUBCOMMITTEE ON TECHNOLOGY AND THE LAW ON HOME VIDEO RECORD PRIVACY LEGISLATION August 3, 1988 H.R. 4947 VIDEO PRIVACY PROTECTION ACT DRAFT TESTIMONY Mr. Chairman and Members of the Committee, thank you for the invitation and opportunity to appear before you today. My name is Vans Stevenson. I am Director of Public Relations for EROL'S, Inc., a suburban Washington, D.C.-based video sale and rental retail chain with 165 stores in nine states and the District of Columbia. In addition to speaking for my company, I am also appearing on behalf of the Video Software Dealers' Association, which represents video retailers and distributors throughout the United States. Approximately 20,000 of the 30,000 video retailers in the United States are represented by VSDA. We support H.R. 4947 and S. 2361, which would prohibit the disclosure of individual customer rental or sales records, except in very limited circumstances. In our view, rental and sales records are privileged matters between the retailer and the customer. VSDA and its members. That is the firm policy of We also agree that there should be certain exceptions to the rule against disclosure of such records. First, we feel that an exception is appropriate when it is necessary in the routine course of business, such as when a delinquent account may require the involvement of a collection agency. Second, we believe that disclosure is warranted where provided pursuant to a legal court order for law enforcement purposes. However, this law enforcement exception should be limited; it should be available only when the law enforcement agency has sufficiently showed its necessity, and when the customer is given notice and afforded an opportunity to appear and contest such an order. A potential problem in the bill's exception for criminal law enforcement lies in the bill's requirement that the user be "given notice and afforded an opportunity to appear and contest such order." See $2710 (d) (1) (A). The bill does not designate who is responsible for giving the notice to the customer. It is important that the law enforcement agency have that responsibility so that the dealer does not become involved in any conflict between the user's privacy rights and the law enforcement agency's alleged need for disclosure. As for requests made in the context of civil litigation, we recommend the approach in H.R. 4947. Disclosure should not be permitted. Third, disclosure should also be allowed when a customer has clearly expressed. written, informed consent. This could be either when the customer fully understands the exact circumstances in which the records are being requested, - 2 or when the customer's name and address will merely be disclosed as part of a general mailing list. We agree that this mailing list exception should not be used if the subject matter of a customer's rental would be indirectly revealed. EROL'S, which is the nation's largest volume Any EROL'S specialty retailer, has had a policy for a number of years prohibiting individual account disclosure. employee who violates that policy faces disciplinary action which could include immediate termination. We have never had to dismiss an employee for violating the policy. In addition to strengthening our existing policy, it is our expectation that your committees will provide both courts and video retailers with guidance in the legislative history as to what kinds of actions retailers might take to safeguard the privacy of video records, so that they may avoid being unreasonably burdened by the legislation. The Committee Report can provide such guidance. We feel strongly that a video dealer should not be unfairly held liable for the unauthorized acts of an employee which are in clear violation of a strong and enforced store policy against such authorized disclosure. The legislation is needed. I am aware of at least three instances when EROL'S has received direct inquiries about individual accounts. Two were from government |