FTC, senator seek online privacy rules

The Federal Trade Commission's call for privacy regulations to protect online

consumers has triggered heightened interest in Congress for comprehensive

privacy legislation.

Sen. Fritz Hollings (D-S.C.), is introducing legislation that would

require World Wide Web sites to conform to the FTC's fair information practices,

meaning that they would have to provide consumers notice about, consent

for and access to information collected online, as well as ensure security

of that data.

Hollings is a member of the Senate Commerce Committee, which plans to

hold a hearing Thursday on the FTC's recommendation. All five FTC commissioners

are scheduled to testify and defend their 3-2 vote on Friday seeking regulation.

The FTC said self-regulation alone isn't protecting consumer online

privacy and that legislation is needed to "supplement self-regulatory efforts

and guarantee basic consumer protections."

In its survey of consumer Web sites, the FTC found that only 20 percent

of those Web sites had implemented all four fair information practices.

And among the 100 most popular U.S. commercial Web sites, only 42 percent

percent did so.

But critics say the survey isn't enough reason to change government

policy. The study is "way off base, it's way over broad," said Ronald Plesser,

an attorney at Piper, Marbury, Rudnick & Wolf LLP in Washington, D.C.,

which represents e-commerce companies. "It shows that the FTC is really

more interested in regulating then in really identifying and solving problems

Plesser,

former general counsel to the U.S. Privacy Protection Study Commission in

1977, said the FTC is seeking "extremely broad-based legislation" on a theoretical

analysis of the fair information practices without examining what is actually

going on in the marketplace. For instance, he said, some companies that

don't offer consumers a "choice" about sharing information with third parties

don't give the option because those companies don't share the data.

But Jason Catlett, president of Junkbusters Corp., a privacy watchdog

group in Greenbrook, N.J., said the FTC's conclusions about the state of

privacy "were really extremely reasonable and unassailable."

The FTC applied "very easy grades" to the Web sites it investigated,

he said. For instance, if a Web site offered any type of access, such as

allowing a consumer to update their e-mail address, the survey scored the

Web site as having access — "and the majority of them still flunked."

The survey is "is going to be a signal to legislators both in Congress

and the states to introduce legislation to protect privacy," said Catlett,

who is scheduled to testify before the Senate Commerce Committee on Thursday.

In calling for comprehensive privacy legislation, Hollings said in a

statement that his bill "will give consumers — not companies — control over

their personal information on the Internet. For many consumers, privacy

concerns represent the only remaining obstacle impeding their full embrace

of the Internet's ample commercial opportunities."

REPORT CARD

"Privacy fears prompt study, delay" [Federal Computer Week, May 22, 2000]

"A question of trust" [Federal Computer Week, May 22, 2000]

BY Patrick Thibodeau, IDG News Service
May 24, 2000

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