U.S. Dept. of Commerce: New Online Privacy Rules Needed

The U.S. Department of Commerce recommends a new privacy bill of rights and an enforceable privacy code of conduct for online firms.

By Grant Gross
Thu, December 16, 2010

IDG News Service — The U.S. government should create an online privacy bill of rights and an enforceable code of conduct for Internet firms handling consumer data and tracking Web users, the U.S. Department of Commerce has recommended.

An Internet privacy policy paper, released by the Commerce Department Thursday, recommends that the U.S. Federal Trade Commission should have the authority to enforce the privacy code of conduct, which would be developed with input from Web companies, consumers and other groups.

The privacy paper, which represents the policy views of President Barack Obama's administration, would represent a major change in the way the U.S. government looks at regulation of privacy on the Internet. The administrations of former Presidents Bill Clinton and George W. Bush largely allowed Web companies to operate without major privacy rules, allowing them instead to create their own standards in the Internet's infancy.

But the Internet has matured, and Web users need to be confident their personal data is secure and not being misused, said Gary Locke, secretary of the Commerce Department. "Self regulation without stronger enforcement is not enough," he said during a press conference. "Consumers must trust the Internet in order for businesses to succeed online."

"Some uses of personal information are essential to delivering services and applications over the Internet," the report said. "Some commercial data practices, however, may fail to meet consumers’ expectations of privacy; and there is evidence that consumers may lack adequate information about these practices to make informed choices. This misalignment can undermine consumer trust and inhibit the adoption of new services."

The Commerce report follows an online privacy paper from the FTC, which recommended a do-not-track feature in browsers earlier this month. A do-not-track mechanism would be one tool to protect consumers online, said Daniel Weitzner, associate administrator for policy at the National Telecommunications and Information Administration, part of the Commerce Department.

The widespread use of the Internet has created "voluminous and detailed" stores of personal information on a range of devices, the report said.

The proposed policies, open for comment from interested groups, would establish a privacy bill of rights would require companies to be more transparent about their use of online consumer information and to provide more detail about why data is collected and how it is used. The proposed bill of rights would put clearer limits on the use of data and require online companies to increase audits and other accountability mechanisms, the report said.

In addition, the report recommends that the Commerce Department create a privacy policy office that would work with the FTC and other agencies to examine commercial uses of personal information and evaluate whether gaps in privacy protections exist. The office would also help develop industry-specific privacy codes of conduct, with input from companies, consumers and other groups.

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