E-Business Warned to Self-Regulate or Expect Legislation

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NEW YORK -- Federal Trade Commissioner Orson Swindle yesterday warned that federal privacy regulations cannot be prevented if e-businesses fail to police themselves.

Speaking at the opening session of the eHealthcareWorld exposition here, Swindle said that within the next few weeks lawmakers will finish the final details of the Health Insurance Portability and Accountability Act, which will provide regulation for privacy and security in the transmission of health data.

"The challenge to the industry is simply this: take a good look at reality," Swindle said. "This train has left the station. We are on the path to a more regulated environment."

Swindle said he opposes government interference in privacy matters because it might stifle economic growth powered by the explosion of the Internet. Last spring, he filed a 27-page dissent when the FTC recommended that Congress institute privacy regulations.

Until recently, the FTC had told Congress to take no action regarding privacy regulations. Despite evidence that more online companies are becoming aware of privacy concerns, the FTC has shown an inclination to get involved, Swindle said.

E-healthcare companies can help to head off privacy legislation by being more open with consumers about what is done with their personal data, Swindle said. Privacy policies should be spelled out clearly and conspicuously on Web sites, not stashed away in pages of legalese.

Consumers should know what data about them is being collected and with whom it is being shared, Swindle said. Companies should be careful about what data is harvested from consumers and not collect information that is unneeded.

Swindle said he feared that the emotional nature of the privacy issue would lead to the passage of knee-jerk legislation that could make Internet businesses unprofitable. He said the industry must do a better job of promoting itself to the public and reminding consumers that Internet marketing has its benefits.

"There's a story you need to tell about all the good things that come from this new technology," Swindle said. "Are you doing a good job of telling your story?"

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