February 24, 1999

Mr. Jerry Berman
Executive Director
Center for Democracy and Technology
1634 I Street, NW Suite 1100
Washington, DC 20006

Dear Mr. Berman: This letter responds to your February 16, inquiry to Louis Gerstner requesting information about IBM's plans for using the new Pentium III processor identifier feature in our consumer PCs.

IBM understands that consumers will continue to embrace the Internet, and the electronic marketplace it makes possible, only to the degree that they trust the technology — and those who use it — to respect the privacy of their personal information. Equipping consumers with knowledge and choice about how their personal information is used is key to building such confidence and trust.

Therefore, IBM promotes and supports active industry leadership in tackling the privacy issues raised by the growth of the Internet and online commerce as a way to help foster this trust. We lead by example. Our SecureWay products lead the industry in ensuring security and trust. In the area of online privacy, IBM is a founding member of the Online Privacy alliance and the TRUSTe and the BBBOnline privacy seal programs. In other areas, we protect consumer privacy through compliance with the appropriate legal requirements, industry guidelines, and our own global internal policies.

We will do no less when it comes to deploying the Pentium III technology in our PCs. Although there are constructive ways to use the processor ID feature to validate user identification, there are also legitimate privacy concerns raised by the potential misuse of this feature. We believe that the use of such identifying technology should be balanced by giving the consumer the ability to decide whether or not to activate it.

That is why, in addition to the actions taken by Intel, IBM plans to go the extra step and disable the processor ID feature at the BIOS (or hardware) level in our Pentium III client systems. This way, if a consumer wants to enable the feature, they will have to do it themselves, using a BIOS "set up" option. Consumers will also get explicit instructions and support via Help materials online and included with their PC.

Consumers purchasing an IBM PC with Pentinum III technology can feel confident that they will have knowledge and control over what kinds of personal information they choose to share when using it.

Thank you for your inquiry

Christopher G. Caine