NCC warns against information regulation.

Consumer Alert and several members of the National Consumer Coalition's (NCC) Privacy Group expressed concern at Congress' seeming rush to pass privacy regulations. Many members of Congress endorse the Federal Trade Commission's so-called "Fair Information Practice Principles" ("FIPPs"). Lawmakers who pledge fidelity to this agenda are essentially promising to limit consumer choice and the free flow of information, and to regulate the burgeoning Internet economy, passing costs on to consumers.

NCC members believe such legislation would be a drastic mistake, and cite some of the problems with the "Fair Information Practices" concepts:

Notice: Requiring websites to post a privacy policy concerning how information is collected and used is, at best, unnecessary. Consumers concerned about their privacy can and do already choose to avoid the few business sites that don't post this information. Complying with federally-mandated legalese, meanwhile, would impose high costs on online vendors, which would either pass costs on to consumers, or in the case of smaller businesses, price them out of the market, thereby reducing consumer choice.

Consent: Decreeing that customers must be able to "opt-out" or must affirmatively "opt-in" to information collection practices also creates cost burdens which are passed on to consumers in the form of higher prices and fewer choices. Consumers already can and should choose with whom they want to share personal information online.

Access and Security: Forcing commercial sites to allow customers access to the information collected about them and the opportunity to change, correct or delete that information would be complicated and costly to merchants and consumers alike. Just as troubling is that "access" and, a fourth principle, "security" are at odds. Requiring companies to keep accessible personal information about consumers online leaves the information that much more susceptible to dissemination via both error and hacker.

The federal government can best protect individual and consumer privacy by keeping a tight rein on its own extensive surveillance and information-swapping practices. Congress should tighten those reins by exercising its oversight authority and forsake the temptation to mandate further collection of consumer information by a national Internet sales-tax scheme or other means.

Consumers particularly concerned about privacy can and should make use of free and pay services to anonymize their online activities (See Consumer Comments, September-October 2000) and stay abreast of the policies of websites with which they choose to do business. (The P3P standards set to go online later this year should make this even easier.) The National Consumer Coalition trusts consumers, not Congress, to decide for themselves which privacy practices best serve their individualized needs. The only thing federal dictats can do for consumers is raise costs and limit choice.