Online Privacy Law Inappropriate says US Federal Trade Commission

US Federal Trade Commissioners have ruled out any new legislation to protect the privacy of Internet users.

In a report to congress last week ( July 13), Commission chairman Robert Pitofsky said industry self regulation was working well enough to hold off on seeking new laws on Internet privacy.

But he warned the Commission expected continuing progress to be made in the development of privacy protection programs and collective enforcement mechanisms to limit the information collected from adults visiting web sites.

"There is more to protecting consumer privacy than simply publishing notices on Web sites," said Chairman Pitofsky.

"We continue to believe that effective self regulation is the best way to protect customer privacy on the Internet, and I am pleased that there has been real progress on the part of the online industry, but this is not the occasion to declare victory," he warned.

"The Commission believes that legislation to address online privacy is not appropriate at this time, but we also believe that industry faces some substantial challenges," Pitofsky added..

"Specifically, the present challenge is to educate those companies which still do not understand the importance of consumer privacy, and to create incentives for further progress toward effective, widespread implementation."

The report, which updated a similar study published in 1998, specifically cites concern over "online profiling" - which enables companies to track consumers' movement on the Web.

The information can then be combined with other personal information to create targeted e-mail shots and CRM and advertising campaigns.

"Responsible elements in the online business community have accomplished a great deal in a short time, but there is a considerable distance to go before consumers can feel secure from privacy invasions in their dealings on the internet," Pitofsky told the Subcommittee on Telecommunications, Trade and Consumer Protection of the House Commerce Committee.

In a shot across the bows of the fledging online profiling business, Commissioner Sheila Anthony suggested legislation may yet be necessary to set a minimum level of privacy protection.

Now the Commission is to hold a workshop on the implications of electronic identifiers that help Web sites track consumers online behaviour.

The Commission will also establish two task forces to look at the cost and benefit of implementing fair information practices online and possible incentives to encourage the development of privacy-enhancing technologies.

The report discusses the results of two Georgetown University studies of commercial web sites and the efforts of the Online Privacy Alliance, TRUSTe, BBBOnline and others.