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Dept Of Commerce Wants Online Privacy Bill Of Rights

December 17, 2010

The US Department of Commerce on Thursday called for the creation of a “privacy bill of rights” for Internet users to set ground rules for companies that collect consumers’ online data and use that information for their own personal gain.

The proposal is intended to address growing tension about the vast quantities of personal data that companies are taking from the Internet — everything from Web browsing habits to smart phone locations to social networking preferences. Most of that data is taken to target advertising.

The report is intended to guide lawmakers, industry and a White House group looking at the issues surrounding Internet privacy.

It came two weeks after the Federal Trade Commission proposed a “Do Not Track” tool to let Internet surfers stop or restrict advertisers from studying their online activities, which include websites they visit, links they click, searches they perform and what purchases they make.

The Commerce Department report proposes the creation of a broad plan for industry behavior to ensure that companies give consumers clear notice about what information is being collected and exactly how they are using it.

The proposal would require companies to give consumers the right to decline some or all of that collection of data and to correct errors in the information that is collected. It would also set clear limits on the use of information gathered and require companies to secure the data they do gather.

These “fair information principles” would require congressional action to become binding. Senate Commerce Committee Chairman John D. Rockefeller, D-W.Va said Thursday that he would support such legislation, according to the Associated Press (AP).

The report also sets specific codes of conduct for some companies to follow, such as Web publishers and marketers, that target ads based on a consumer’s online behavior. Those specific codes of conduct would be voluntary, but enforceable. The FTC could take action against companies that commit to abide by them and then do not comply.

The codes of conduct would be developed by Internet advertising networks, Web publishers and marketers, social networks and other online services, and could become one of the more controversial elements of the proposal.

The report recommends the formation of a federal privacy office inside the Commerce Department to bring the stakeholders together to work out the new codes of conduct. While the proposal to create such an office signals that the Obama administration is elevating the importance of Internet privacy, the decision to place it inside the Commerce Department has alarmed some privacy groups.

They complain that the department is more concerned about protecting corporate interests than consumer needs — based on its willingness to let the industry help write the new rules.

“Having the Commerce Department play a role in protecting privacy will enable the data collection foxes to run the consumer privacy henhouse,” Jeff Chester, executive director of the Center for Digital Democracy, told AP.

The Interactive Advertising Bureau (IAB), which represents the online advertising business, praised the new report for recognizing the importance of including the industry in developing rules for codes of conduct online. IAB added that the report validates the industry’s own efforts at self-regulation.

The report, approved by the White House, is intended to guide Internet companies and marketers as well as lawmakers as they develop a new plan to safeguard online privacy without cutting off Internet commerce.

“Consumers must trust the Internet in order for businesses to succeed online,” Commerce Secretary Gary Locke said in a statement.

Commerce officials hope the report will also lead to discussions with foreign governments to align global standards for acceptable industry behavior. The European Union said it plans to update its privacy regulations to give consumers more control over their online data.

The Commerce Department’s report does not take a stance on the FTC’s “Do Not Track” proposal, which is at the center of a hot debate over how to give consumers more control over their online information.

Although privacy groups have welcomed the FTC proposal, the online advertising industry has warned that allowing consumers to turn off all online tracking could have unintended consequences because tracking is used to deliver personalized Web content — not just Internet ads.

The Commerce Department report also includes recommendations to establish national standards on data breaches that would require companies to notify consumers in the event of a breach. Most states already have similar laws in place, but are often inconsistent.

The report also called for a review of the Electronic Communications Privacy Act, a 1986 law that extended wiretapping restrictions to e-mail messages and other data files, but is now considered out of date.

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