In the information age, sensitive and confidential data is routinely stored in or transmitted across computer networks. Online businesses often collect and use data to maximize consumers' online experience and options. For example, online booksellers can collect data to make reading recommendations; online advertisers can use data to offer consumers coupons for products they use; and online media sites can collect data to allow visitors to customize the news they receive.

Cisco is recognized as a leader in network security, providing technologies designed specifically to protect data. Customers worldwide use Cisco network security technology to protect their business and personal data. Cisco's network security technology integrates security mechanisms throughout all aspects of the network to identify, prevent, and then adapt to security threats as they arise. Within its own operations, Cisco uses this technology to safeguard customer, employee, and other business data.

While all businesses must maintain consumer trust to succeed, Internet businesses that maintain virtual interaction with consumers are particularly dependent on consumer confidence. Without trust in the integrity of electronic transactions, consumers will be hesitant to use online services and e-commerce, and companies may not achieve the benefits of online interactions.

Businesses generally understand the need to maintain the integrity of consumer data and, therefore, consumer confidence. The issue is how best to balance the legitimate needs of consumers to maintain their privacy, the desire of consumers to have the best possible online experience, and the ability for both businesses and consumers to reap the benefits of online interactions. We must achieve this in the context of a global community of Internet businesses and users, each with unique cultural requirements and attitudes affecting their level of desired privacy.

As state, provincial, and national governments seek to address the privacy issue, it is important to create frameworks that work well in a global economy. Overly burdensome privacy policies can become barriers to trade, preventing the free flow of information across borders. Further, stringent rules against cross-border data flows may hurt development of new technologies, hindering the full potential of online educational, commercial, and entertainment applications.

Cisco Position: Consumer Trust Is Critical

A core component of Cisco's business is creating products that protect data. We understand the data protection challenges that our global customers face and we deliver innovative solutions to meet their needs. Cisco's values and its technology are combined in our own operations to protect our employee, customer, and business data.

Consumer trust and confidence is critical to Cisco's business and to any technology and Internet-related business; as a result, the industry must protect citizens' privacy. Therefore, Cisco constantly reviews and improves its own privacy policy. While our online privacy statement describes how we treat private information, we actively engage stakeholders to understand their views about collecting, using, and protecting personal and private information. Our objective is not only to meet the legal requirements for managing private information, but also to understand the attitudes and expectations of our stakeholders on privacy and security issues related to our business. By engaging our stakeholders in this way, we can adjust our policies and practices for managing these issues as the environment and expectations change.

Because disparate and multiple privacy rules place a heavy burden on global companies, we support a model of industry self-regulation (as opposed to government intervention) in which innovative tools to give consumers greater choice in both protecting their personal data and understanding how it may be collected and used. We believe the industry can achieve a reasonable balance between consumer protection and business requirements, as evidenced by several ambitious and successful industry-led initiatives in the recent past. Where legislation is necessary, we encourage standardization of rules across global jurisdictions.