Leave Policing Up to Private Sector

FRAMINGHAM (07/03/2000) - Legislation or stronger federal regulations won't provide greater privacy protections on the Internet and could stifle the remarkable innovation occurring there. Rather, the best way to effectively protect consumer privacy on the Net is to encourage the many industry-developed efforts that are now taking place to provide strong privacy notices on e-commerce sites and choice with respect to transfers to of information to third parties.

Consumers are engaging in e-commerce at an unprecedented pace. Likewise, the growth in e-commerce is in large part responsible for our current economic prosperity. Every day, we're seeing the birth of new and innovative business models that will help us manage information in the Information Age. New laws or broader regulations could even limit exciting new personalization technologies, some of which were designed to allow individuals to control what information they give to others.

Consumer knowledge and empowerment are the keys to a successful privacy policy.

And for privacy protection to work, we need to give consumers the opportunity to look at a Web site, check whether it has an easily understandable privacy policy and be certain that any description of the site's practices is accurate.

Consumers can then make an informed decision about whether to proceed at that site or go to another. Companies know that they must win consumers' trust, or their businesses won't reach their potential levels of success.

Likewise, a greater level of consumer choices, including consent or "opt-in" options, should be provided for certain types of sensitive information. For example, Web sites that provide access to medical advice or detailed financial information should offer consumers stronger choices regarding data privacy than Web sites that sell less-sensitive products and services.

Industry isn't always opposed to privacy legislation, as some suggest. Consider the case of children's privacy on the Internet. Industry, Congress, the U.S.

Federal Trade Commission (FTC) and privacy advocates worked together in passing the Children's Online Privacy Protection Act of 1998.

When evaluating the potential for regulation in the broader area of Internet privacy, it's important to give appropriate recognition to industry's continued and significant progress and commitment of resources to develop and implement effective protection. A recent FTC report states that all 100 of the most popular Web sites post privacy notices. Moreover, 88 percent of all sites post privacy notices, up from 66 percent in 1999 and 14 percent in 1998.

Consider companies' rapid adoption of The Direct Marketing Association's Privacy Promise and the seal and enforcement programs of the Better Business Bureau Online and Truste. More than 2,500 companies have signed on to the Privacy Promise and will empower consumers with notices and choice concerning the transfer of their personal information to third parties. Likewise, BBB Online and Truste have quickly signed up several thousand participants.

Businesses, Congress, the FTC and the U.S. Department of Commerce will continue to work together and discuss these important issues. Given the continuing development, innovation and significant progress by business, coupled with the fact that no substantial evidence of harm to individuals has been identified, the appropriate course of action isn't delegating privacy protection to a regulatory agency. Instead, we should operate within a framework that furthers market choices on consumers' privacy preferences. That will result in an Internet privacy program that will protect consumers and promote the continuing growth of e-commerce.

Ronald L. Plesser is a partner at the Washington law firm Piper Marbury Rudnick & Wolfe LLP and specializes in IT matters. Contact him at ron.plesser@piperrudnick.com.

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