DMA, White House Step up Privacy Work

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The White House and the Federal Trade Commission increased their privacy efforts last week and asked the Direct Marketing Association and other groups to do so as well.


The White House, which reiterated its support of self-regulation as a means of protecting online consumers, asked the DMA to demonstrate by next month that the industry is willing to regulate itself. In October 1997, the DMA announced its "Privacy Promise," which is a public assurance that by July 1, 1999, all DMA members who market to consumers will tell customers how information will be shared with other marketers.


While the July deadline still holds, DMA president/CEO H. Robert Wientzen sent a letter to members on Dec. 11 saying, "The White House, the Department of Commerce, the Federal Trade Commission and key members of Congress are urging that we demonstrate by January 1999 -- and not next summer -- that industry self-regulation is being practiced industrywide."


The letter also said that to help protect businesses from potentially onerous privacy legislation, the DMA has voted to strongly encourage members to sign on immediately to show their support for the promise.


"The White House has challenged the industry to come forward and show progress sooner rather than later," said Jerry Cerasale, the DMA's senior vice president of government affairs. "Buy-in from membership would allow us to show that American industry is, in fact, really getting behind self-regulation."


In addition, Cerasale said the DMA met with the FTC last week and is working with the commission on another "surf day" in January, where the FTC would test Web sites to make sure they are in compliance with privacy standards. The FTC's last surf day, which was in March, looked at 1,400 Web sites and found 86 percent failed to make a passable attempt at publishing their information collection and use practices online.


"It's time to take a new look at what it looks like out there," Cerasale said.


The FTC also announced plans to explore international consumer fraud in the electronic marketplace during a spring 1999 workshop. Though a date hasn't been set yet, the FTC said it will use the workshop to examine U.S. perspectives on international consumer protection and on what consumers will confront as they buy goods or services from foreign businesses over the Internet. Issues will range from what laws apply to direct, international business-to-consumer transactions to which governments have authority to protect consumers.


"More and more consumers are engaging in e-commerce shopping, [and] shoppers venturing on the Internet should not have to worry about which consumer protection laws apply to their purchase," said Jodie Bernstein, director of the FTC's Bureau of Consumer Protection.


By emphasizing consumer protection, the United States hopes to promote global understanding of the issues at stake and develop a thoughtful approach to pave the way for Internet retailing to reach its full potential.


While the workshop announcement isn't directly related, it comes on the heels of a series of recent meetings between the United States and the European Union as they try to iron out their differences regarding personal data protection. Under the EU's Internet privacy rules, an individual must give his permission before any personal information about him can be sold or rented to a third party. In the United States, no such permission is required.


Although the EU requires the country of the third party buying or renting lists to meet its standards of privacy protections, it has agreed not to interrupt the flow of data between its member nations and the United States while negotiations continue. Last week, Charles Prescott, vice president of international business development and government affairs at the DMA, met with key members of the European Commission in Brussels.


"This is the first time that we have had an opportunity to represent the direct marketing industry's views," he said. "Establishing a relationship with significant members of the EC is an important step in keeping DMA members informed about the evolution of the Data Protection Directive and how it could impact business in Europe."


During his visit, Prescott also addressed American businesses' reaction to the directive at the FEDMA Council Day. The directive requires that all 15 members states of the EU adopt common privacy laws governing the collection and use -- including transmission abroad -- of personal data of individuals.
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