FTC, Senator Seek Online Privacy Rules

WASHINGTON (05/23/2000) - The U.S. Federal Trade Commission's (FTC) call for privacy regulations to protect online consumers has triggered heightened interest in Congress for comprehensive privacy legislation.

U.S. Senator Fritz Hollings, a Democrat from South Carolina, is introducing legislation that would require Web sites to conform to the FTC's fair information practices, meaning that they would have to provide consumers notice about, consent for and access to information collected online, as well as ensure security of that data.

Hollings is a member of the Senate Commerce Committee, which plans to hold a hearing Thursday on the FTC's recommendation. All five FTC commissioners are scheduled to testify, and defend their 3-2 vote on Friday seeking regulation.

The FTC said self-regulation alone isn't protecting consumer online privacy, and legislation is needed to "supplement self-regulatory efforts and guarantee basic consumer protections."

In its survey of consumer Web sites, the FTC found that only 20 percent of those Web sites had implemented all four fair information practices. And among the 100 most popular U.S. commercial Web sites, only 42 percent percent did so.

But critics say the survey isn't enough reason to change government policy. The study is "way off base, it's way over broad," said Ronald Plesser, an attorney at Piper, Marbury, Rudnick & Wolf LLP in Washington, who represents e-commerce companies. "It shows that the FTC is really more interested in regulating then in really solving identifying and solving problems."

Plesser, former general counsel to the U.S. Privacy Protection Study Commission in 1977, said the FTC is seeking "extremely broad-based legislation" on a theoretical analysis of the fair information practices without examining what is actually going on in the marketplace. For instance, he said, some companies that don't offer consumers a "choice" about sharing information with third parties don't give the option because those companies don't share the data.

But Jason Catlett, president of Junkbusters Corp. in Greenbrook, New Jersey, a privacy watchdog group, said the FTC's conclusions about the state of privacy "were really extremely reasonable and unassailable."

The FTC applied "very easy grades" to the Web sites it investigated, he said.

For instance, if a Web site offered any type of access, such as allowing a consumer to update their e-mail address, the survey scored the Web site as having access - "and the majority of them still flunked."

The survey is "is going to be a signal to legislators both in Congress and the states, to introduce legislation to protect privacy," said Catlett, who is scheduled to testify before the Senate Commerce Committee on Thursday.

In calling for comprehensive privacy legislation, Hollings said in a statement that his bill "will give consumers -- not companies -- control over their personal information on the Internet. For many consumers, privacy concerns represent the only remaining obstacle impeding their full embrace of the Internet's ample commercial opportunities."

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