FTC workshop: Wireless e-commerce is both devil and saint

By Patrick Thibodeau, Computer World |  Business

WASHINGTON -- WIRELESS e-commerce was portrayed as both a devil and a saint at a workshop held here this week by the U.S. Federal Trade Commission, with some attendees saying the technology is capable of delivering pinpointed data and others warning that it also could be used by companies to build Big Brother-like profiles of individual users.

"There are huge, looming privacy issues in the wireless space because of the collection and aggregation of new information," said Alan Davidson, staff counsel at the Center for Democracy and Technology, a Washington-based advocacy group that focuses on privacy. Location-specific information provided over a period of time to users and then kept by wireless services could create "a very detailed and invasive dossier of a person's movements," Davidson claimed.

Such concerns have emerged as a hot-button issue in recent months. But Lawrence Ponemon, a partner at New York-based consultancy PriceWaterhouseCoopers, said service providers need to offer users "very significant personalization to have success in the wireless environment." Without localized information, Ponemon said, a wireless device "becomes meaningless" in the hands of a mobile user.

The FTC's wireless workshop began Monday and concluded Tuesday. The commission's intent was to get a sense of the privacy, security, and consumer protection issues raised by the advent of "m-commerce," shorthand for mobile commerce.

Joel Winston, an associate director at the FTC's Bureau of Consumer Protection, indicated Tuesday that the commission would like to see companies in the wireless services business take steps toward self-regulation. "We at the FTC are very big fans of self-regulation," Winston said. "It makes our lives easier."

As an example, Winston pointed to an agreement the FTC reached last summer with a group of companies that collectively control more than 90 percent of the online advertising market. Under that deal, the companies promised to follow a set of
self-regulatory guidelines governing the collection of personal information from Internet users.

Providers of wireless services are making a similar self-regulatory effort. But unlike the self-imposed standards being sought for the wired world, wireless trade groups, such as the Cellular Telecommunications Industry Association, appear to be advocating a more rigorous privacy standard requiring end-users to "opt in" by agreeing to let their personal information be collected. Opt-out approaches, in which users have to remove a default setting that would let their data be gathered, are used by many e-commerce Web sites now.

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