Policing Online Privacy

12/20/2010 12:01 AM Eastern

Washington — Behavioral advertisers
and others who rely on profiling potential
customers online will have some more time
to chew on the carrot of self-regulation before
they are threatened with the big stick of
new federal rules, according to a report from
the Commerce Department’s Internet Policy
Task Force.

The task force issued
a report last
week that will eventually
provide the
basis of the Obama
position on online
privacy policy,
but only after comments
(due by Jan.
28) are received and
vetted, and final recommendations made.

The task force recommended an online
privacy Bill of Rights, the goal of which
would be to prompt companies to be “more
transparent about their use of consumer information;
to provide greater detail about
why data is collected and how it is used; to
put clearer limits on the use of data; and to
increase their use of audits and other ways to
bolster accountability.”

But task force officials, including former
cable attorney and current Commerce Department
general counsel Cameron Kerry,
suggested it was looking for stakeholders
that would be part of the process of drafting
those rights, and would step up to abide by
them without a legislative gun to their heads,
or a stick to their backsides.

The report provides for at least a couple of
ways the government could enforce privacy
rules short of legislation, including administration
pressure and increased enforcement by the
FTC under its current authority. It also suggested
legislation to create a safe harbor for those
who adhere to the voluntary bill of online rights.

That last option, with the threat of regulation
as the alternative to compliance, would
appear to be rather less voluntary than the
other options, something the report concedes.
“A safe harbor is only as effective as
the perceived threat of legislative, regulatory,
or other legal risk faced by the company
in absence of the ability to resort to safe harbor

While the FTC can enforce voluntary industry
codes on those who volunteer, it can’t
do anything about the companies that don’t
want to participate. The Bill of Rights would
set enforceable rules of the road for all players.

Both Republicans and Democrats say online
privacy will be an issue in the next Congress,
including incoming Energy & Commerce
Committee Chairman Fred Upton (R-Mich.),
who told Multichannel News in an interview
that “the status quo is not acceptable.”

Jeff Chester, executive director of the
Center for Digital Democracy and a strong
voice for greater government online privacy
protections, was less sanguine. He said
that the report raises good questions, but
that it is past time for the government to be
providing some answers. “If the Commerce
Department really placed the interests of
consumers first, it would have been able to
better articulate in the report how the current
system threatens privacy,” he said.

Want to read more stories like this?
Get our Free Newsletter Here!