FTC: Privacy Laws Inappropriate at This Time

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The U.S. business world's ability to regulate itself in the touchy arena of consumer privacy appears sufficient for the time being even though numerous issues remain, the Federal Trade Commission concluded this week in its long-awaited report to Congress.

The report, "Self-Regulation and Privacy Online," was approved by the commission 3-1 and delivered to the House Commerce Subcommittee on Telecommunications, Trade and Consumer Protection by chairman Robert Pitofsky and commissioners Sheila F. Anthony, Mozelle W. Thompson and Orson Swindle. It was part of a four-year effort to encourage implementation of online consumer privacy protection.

In general, the report detailed the growth of the e-commerce world, how Web sites collect data and how consumers' concerns about privacy should be addressed. Within its recommendations were calls for more task forces, government-sponsored public workshops and another online survey to reassess the industry's progress.

"Industry faces some substantial challenges," the report said. "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."

A flurry of business lobbyists and consumer advocates weighed in with statements after the report was released reaffirming their long-entrenched views: Industry groups generally applauded the conclusions while civil liberties organizations discounted the report.

At the Electronic Privacy Information Center, Washington, executive director Marc Rotenberg said plenty of evidence exists proving self-regulation hasn't worked, adding, "What these privacy policies are telling people is how much privacy they don't have." At the Cato Institute, Washington, a statement was released saying, "Internet privacy isn't broke, so don't try to fix it." At the industry-sponsored Online Privacy Alliance, Washington, legal spokeswoman and former FTC commissioner Christine Varney said that the report was terrific and that it reflected how much work has been accomplished by the business world over the last year.

However, Congress has yet to rule on the subject, and even the FTC made it clear that problems remain. Rep. Edward Markey (D-MA) has long hinted that legal boundaries on privacy may be required, and sources expect him to introduce an online privacy bill of rights despite the FTC's findings.

H. Robert Wientzen, president/CEO of the Direct Marketing Association, New York, heaped praise on the commission's findings and said the report was excellent news for all companies involved with e-commerce.

"From the outset, we have maintained that industry self-regulation is far better than government regulation for both industry and consumers," he said, adding that the Clinton administration had long supported the same position.

Copies of the FTC report are available on its Web site at www.ftc.gov.

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