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FTC Calls for Action But Consensus Lacking.

Industry efforts to ensure the privacy of consumer data collected online have fallen short, according to a Federal Trade Commission report. As a result, the commission has asked Congress to establish standards for the collection of information online, and to set up an agency with the authority to promulgate more detailed standards. But two of the five FTC commissioners dissented from the recommendations. Commissioner Orson Swindle, for example, called the report "embarrassingly flawed."

The FTC based its conclusion on its most recent survey of Web sites, which found that only 41 percent of the 335 randomly selected companies offered consumers basic notification of information collection policies and choices about how personal information collected about them online would be disclosed. Far fewer offered disclosures regarding consumer access to that information or guaranteed security of that information, as the FTC had suggested businesses must do if they wanted to avoid having these activities regulated.

In his statement, Commissioner Thomas B. Leary was not wholly opposed to a legislative solution. He suggested, however, "that any across-the-board legislative mandate should be confined to notice alone."

He also noted that the need for legislation should not be viewed as an impediment to current action. He called on the commission to exercise its existing authority to prohibit unfair or deceptive practices and to redouble its efforts to educate consumers.

In his dissent, Commissioner Swindle said that the commission "owes it to Congress--and the public--to comment more specifically on what it has in mind before it recommends legislation that requires all consumer-oriented commercial Web sites to comply with breathtakingly broad laws whose details will be filled in later during the rulemaking process."

Swindle added that he is troubled not only by the vagueness of the legislative proposal but also by the disregard for the enforcement burden and the attendant costs businesses would be asked to bear. He further said that the FTC has failed to provide a well-founded basis for legislative action, asserting that the commission's own survey shows that significant progress toward voluntary disclosure of privacy policies has been made. Swindle cited voluntary privacy initiatives not addressed by the commission's survey, and he asked why it would not be appropriate to allow the marketplace to solve the problem by letting consumers "vote with their mouse."

Privacy groups, such as the Electronic Privacy Information Center, favor legislative action while businesses continue to push for a voluntary approach to privacy policies.
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Title Annotation:Federal Trade Commission
Author:Harowitz, Sherry L.
Publication:Security Management
Article Type:Brief Article
Geographic Code:1USA
Date:Aug 1, 2000
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