FTC: Internet Should Be Self-Regulated

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Washington -- The federal government should not regulate
consumers' security on the Internet, the Federal Trade Commission recommended last
Tuesday.

Testifying before the House Subcommittee on
Telecommunications, Trade and Consumer Protection, FTC chairman Robert Pitofsky said
dramatic improvements have been made in online security, and government intervention is
unnecessary.

"The commission believes that self-regulation is the
least intrusive and most efficient means to ensure fair information practices online,
given the rapidly evolving nature of the Internet and computer technology," Pitofsky
said.

He cited a recently released study by Georgetown University
to demonstrate his point.

The Georgetown Internet Privacy Policy Survey found that 66
percent of the Web sites studied posted at least one disclosure about their information
practices.

However, the FTC said, Internet sites are supposed to have
privacy disclosures on four points: notice, consent, access and security. This means that
more work needs to be done.

"Significant progress has been made, but continued
vigilance is needed because we are not where we want to be," FTC commissioner Orson
Swindle said. "The way to get where we want to be is not through more laws and
regulation."

Sheila F. Anthony, another FTC commissioner, agreed that
more work was needed, but she disagreed about what should be done to ensure that all four
disclosure principles were met.

"The time is ripe for Congress to enact federal
legislation to protect online-consumer privacy, at least to the extent of providing
minimum federal standards," Anthony said while testifying before the committee.

"As a whole, industry progress has been far too slow
since the commission first began encouraging the adoption of voluntary fair practices in
1996," she added.

Rep. Edward J. Markey (D-Mass.), a member of the committee,
did not seem impressed with the progress thus far.

"This industry deserves a big fat 'F,'" Markey
bluntly said after the witnesses were asked to grade the industry by Rep. Billy Tauzin
(R-La).

The average grade given by the FTC members was a
"C," which Markey stated was a result of "grade inflation."

Committee chairman Rep. Tom Bliley (R-Va.) does not want to
see the government get involved.

"Electronic commerce changes so quickly that I am
concerned that a government-mandated privacy policy would stifle innovation," Bliley
said.

He also announced that the Commerce Committee will post a
privacy policy soon, making it the first committee in Congress to do so.

"If industry wants to have the freedom to adopt
privacy policies in response to market incentives, and not government regulation, I
encourage industry to lead the way," Swindle said.

States News Service

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