Grove is acutely aware that his support for new privacy legislation and for new authority to collect sales tax on Internet purchases puts him at odds with most of his colleagues on two of the biggest issues facing the industry. While he included those positions in a written statement for the committee, he didn't elaborate on them until he was asked to by Republican Sen Ted Stevens, of Alaska.

Grove said he was reluctant to speak about the issues because he "didn't want to be hit" by colleagues when they testified following him. But under questioning he maintained that a failure to achieve "tax neutrality" between offline purchases and Internet sales will contribute to national economic disparities. He also said that the technical difficulties of collecting taxes across different jurisdictions are "not insurmountable."

At a round-table discussion later with The Wall Street Journal, Grove and chief executives from other technology companies waged a remarkably spirited debate over taxes and privacy. Jay Walker, Priceline.com founder, said it already collects taxes on airline tickets, cars and some grocery items that its customers can buy on the Web. "It's not like we live in a tax-free zone," Walker said.

"Jay, that's not true," Grove responded, saying that people who buy books online generally don't pay the same taxes as those who buy from bookstores. John Warnock, head of Adobe Systems Inc., noted that traditional retailers use roads and resources of the tax jurisdiction where they are located. Internet company uses none of that, except for the transportation of the product to the customer," he said.

Grove said during his congressional testimony and again afterward that he believes federal Internet-privacy laws are "inevitable" and preferable to a patchwork of privacy laws in 50 different states.

-- The Wall Street Journal