FTC recommends congressional action on online concerns

ITworld.com –

The Federal Trade Commission has come out in favor of legislation to ensure consumer privacy on the World Wide Web. The call went forth Monday as the FTC reported to Congress on the present status of industry compliance with privacy standards.

At the time of the report's release, dissent was heard from at least one commissioner, who held that self-regulation, and not legislation, was still the answer to a privacy question that is gaining increasing attention from IT shops and the general public.

FTC commissioners concluded that, while self-regulatory efforts have achieved some progress, the lack of broad-based consumer protections online requires legislative action. The FTC found that Websites that had published privacy statements did not consistently enforce them.

This is a move that many e-commerce companies hoped would not happen, said Jay Stanley, analyst at Forrester Research, in Cambridge, Mass. "This has been a long time coming," he said.

"Privacy advocates have worked hard for this," said Stanley, whose research focuses on the Internet and public policy. "This is a pretty big deal."

Stanley recently drafted "The Internet's Privacy Migraine," a report that suggests that Internet privacy legislation is almost inevitable in the short term.

As the report was released, FTC Chairman Robert Pitofsky said, "The number of Websites meeting basic standards of privacy protection is far too low, endangering consumer confidence in this marketplace."

The FTC report recommends that Congress enact legislation to ensure a minimum level of privacy protection for online consumers, establishing "basic standards of practice for the collection of information online." Commercial Websites that collect personal identifying information would be required to comply with four fair information practices: "notice, choice, access and security."

At the same time that it released its report, the FTC noted the findings of a recent survey of the busiest sites on the Internet. The results showed that only 20 percent of randomly sampled sites were found to have implemented all four fair information practices.

The commission's vote to release this report was not without dissent. Commissioner Orson Swindle called the majority's recommendation "an unwarranted reversal of 'the FCC's'earlier acceptance of a self-regulatory approach" -- a reversal that took place despite what he described as "continued, significant progress" in self-regulation. The report is extremely flawed in its presentation of fact, Swindle asserted.

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