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agencies, and one from an attorney representing a client in a

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checking out tapes at one of our stores during working hours.

We refused the request for information.

3.

An attorney in a divorce proceeding requested

the rental records of the defendant in the case.

We refused.

A subpoena was threatened but never served.

Other home video retail businesses have encountered

similar inquiries.

These instances of efforts to obtain

video store records include:

An attempt by the attorney for a spouse in a

divorce proceeding to show, through video

records that the other spouse was

an unfit

parent.

The records were refused.

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to obtain the video records of public figures, such as

government officials.

These incidents suffice to put the Congress on notice

about this serious potential for invasion of privacy and

chilling of the exercise of the first amendment right to view

films free from fear of harassment or adverse publicity.

Many state and local laws do not provide adequate protection.

Congress should act.

While the attempts to obtain customer records were

successfully rebuffed in the instances I have referred to,

there is always the threat of efforts to judically enforce

subpoenas seeking disclosure.

Home video dealers should not

have to face potential liability for failure to comply with a

subpoena, on the one hand, or lawsuits by their customers

because they have complied, on the other hand.

Because we feel strongly about protecting the privacy of our customers and upholding the law, we are also concerned about consistency between federal and state legislation currently in effect. As video dealers, we would like clear

guidance as to which legal requirement would apply in case of conflicting standards.

We applaud the proposed bills to formally protect a reasonable right of privacy for the video customer. We

believe that the legislation will help to strengthen our

company's policy as well as similar policies practiced by the

other video retailers in VSDA.

Thank you again, Mr. Chairman and Members of the

Committee for the opportunity to speak to you today on behalf

of both EROL'S, Inc. and the Video Software Dealers

Association.

I will be pleased to answer any questions you may

have.

- 6

Mr. KASTENMEIER. Mr. Richard Barton.
Mr. BARTON. Mr. Chairman, and I--

Mr. KASTENMEIER. Incidentally, without objection, your statements collectively will appear in their entirety as submitted to the committee, even if you have summarized your remarks.

Mr. BARTON (continuing). Mr. Chairman, and members of the two subcommittees, it is real pleasure to be here today. I hope I can say this after the testimony, since you know, I am going to take a little bit different tack than the other witnesses here.

Before I begin, I would like the indulgence of the subcommittee to introduce a very prominent person in our industry, Alexander Hoffman, who is sitting right over here. He is the recently retired group vice-president of Doubleday, Incorporated and former Chairman of the Direct Marketing Association. He was one of the spearheads of the Direct Marketing Association's activities in the privacy area in connection with the Privacy Protection Study Commission, and afterwards, which I think dramatizes that we are very concerned about the privacy issues raised here and about the general concerns of the American public in privacy.

We want to cooperate with the subcommittees, and we have been working with the staffs. We are very concerned about the privacy issues that have been raised here by the other three witnesses, and we agree that the specific instances which they cite in most cases are things that should be prevented either by law or certainly by practice within their industries.

We do not agree that Judge Bork's personal preferences for video tapes should have been released. We do not agree that specific titles and reading habits of specific individuals should be released from libraries. But this bill, we believe, goes far beyond remedying the ills which gave rise to the original bills.

The language of the two bills would actually have a significant impact on what heretofore has been considered the completely legitimate and accepted marketing practice of a major segment of American industry. That is the direct marking industry. We believe that the bills misunderstand or really don't address the question of how mailing lists are used and how mailing lists are put together, in fact, even physically what mailing lists are.

Mailing lists as such do not contain specific data about specific individuals. They are lists, they are aggregates of people, usually on computer tape which we don't even see who may have common characteristics such as income, buying patterns, places where they live, life style and what is important here for the subject matter of this hearing, either vocational or avocational interests which indicate that they might be receptive to receiving a specific offer or contributing to a specific charity or for that matter supporting of specific political candidate.

Companies, we agree, do have the knowledge of specific buying habits of their customers in the same way that Erol's does and the same way libraries do, but this is not translated onto a mailing list. The only physical manifestation that comes out of the mailing lists is a piece of paper with a name and address on it that goes on an envelope or a catalog.

There is no specific information which is given out by a mailing list. To make an important point, there is no complaint that I know of, at least in the history of the Direct Marketing Association involvement in issues like this, that specific information about specific individuals has been given out from the mailing lists and for mailings.

In 1977 the Privacy Protection Study Commission which was cited by the ACLU favorably, maybe not this part of it, but other parts, agreed with the industry, the compilation and use of mailing lists did not invade anyone's privacy and should not be legislated against.

But even before the Privacy Protection Study Commission, in 1971, the Direct Marketing Association realizing people's growing concerns about privacy, developed an industry-wide mail preference service, administered even to this day by the Direct Marketing Association to allow people to get off mailing lists.

We have advertised that program very, very broadly throughout the country with hundreds of millions of impressions of advertisements in magazines and newspapers and dealing with people like Action Line editors and consumer groups.

It has been endorsed by organizations such as U.S. Office of Consumer Affairs and the National Council of Better Business Bureaus. We also began at that time another successful program to insist that companies which rent their lists give the customers an opportunity to have their names deleted.

We believe fervently in that principle and that is recognized in the two bills that are being considered before us today. So we do believe that people should have the opportunity to get off of a mailing list. We promote that nationally. But we do not believe that mailing lists and the use

of mailing lists per se is a violation of anyone's privacy rights. There is some specific language I would like to approach in both bills that gave us great difficulty.

First, the current language in both, I believe, prohibits any disclosure which would directly or indirectly disclose the character of the video tape rented. As I said before, it has generally been understood that there is no harm in the commercial use of the character of the material rented on a mailing list.

It doesn't invade somebody's privacy to put the person on a mailing list because he may have or she may have rented classic westerns or video tapes about workouts or whatever. Pick a subject. Especially when the individual has the power to stop such rental.if he or she chooses.

If he ran a golf video club list or a sailing list, you can make a fairly safe assumption that that person on the list has interests in those specific matters. We think it is legitimate to market to these people, but the effect of this legislation would be to prohibit the use of these lists unless affirmative consent of the consumer is obtained, which frankly is tantamount to prohibition for use of these lists.

Therefore, under the proposed legislation a general list can be rented, but a list that indicates their interests, at least as far as video tapes are concerned, can't or at least practically can't be. As I said, it has been generally established that there is very–no real privacy interest in renting the names of customers and their general interests.

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