Proposed privacy watchdog gets mixed reviews

News reports suggesting U.S. President Barack Obama's administration is planning to appoint a new privacy watchdog and push for new privacy laws met with mixed reaction Friday, with some critics questioning whether new laws are needed.

The Wall Street Journal reported late Thursday that the U.S. Department of Commerce is preparing a report to outline its privacy policy goals, with a new position created to oversee privacy efforts.

While it's unclear what issues new regulations would address and what role a privacy watchdog would have, some observers cheered a new focus on privacy from the Obama administration.

"Better late than never," U.S. Rep. Joe Barton (R-Texas), co-chairman of the Congressional Privacy Caucus, said in a statement. "Neither the government nor the industry are doing enough to protect people's privacy, but the Department of Commerce's decision to step up may shine some light on practices that seem to thrive in the dark. I am glad more and more folks -- in the government and otherwise -- are beginning to realize that there is a war against privacy."

But critics pointed to a couple of potential problems, including questions about whether new privacy regulations are needed and about potential conflicts with the U.S. Federal Trade Commission, an independent agency that now holds U.S. companies to their privacy promises. FTC officials have been signaling a new privacy push in recent months.

Privacy groups and some tech companies have been pushing for stronger laws for years, but there's "an absence of any real data and very little analysis" of the costs of new regulations, said Thomas Lenard, president of the Technology Policy Institute, a free-market think tank.

New regulations, including an online do-not-track list being considered by the FTC, could hurt e-commerce and advertising, while delivering intangible benefits, Lenard said. So far, groups expressing concern with Web sites and ad networks tracking user behavior have shown few negative consequences, he said.

"After more than 10 years of talking about this, we're talking about hypothetical harms, rather than a lot of real harms," he added.

But new regulations could lead to fewer targeted ads, less effective ads and lower quality Web content, he said.

A new position in the Obama administration to coordinate privacy policy wouldn't necessarily be a bad idea, however, Lenard said. Privacy is an important policy issue that the administration should be focused on, he said. "Obviously, if it's a policy I disagree with, I might prefer that they have no policy," he added.

On the other side of the U.S. privacy policy spectrum, privacy advocate Jeffrey Chester questioned the Commerce Department's push to become the central agency in charge of privacy policy. That approach raises questions about a continued FTC role in enforcing privacy rules, he said.

"Industry is fearful of the new Democratic majority at the FTC and a new serious commitment to address privacy," said Chester, executive director of the Center for Digital Democracy, a digital rights group. "Commerce is the wrong place to protect consumers."

The Commerce Department and the Obama administration have an interest in protecting U.S. companies, and Google, in particular, has strong ties to the White House, Chester said. Those ties "place consumer privacy further at risk," he said.

The Commerce Department appears to be headed toward minimal privacy regulations, with online companies allowed to continue their data collection practices, Chester added. The White House launched an inter-agency committee on Internet privacy last month, with a focus on creating new legislative proposals.

Representatives of Google and Facebook, two companies that have faced privacy criticism in recent months, declined to comment on the Commerce Department's privacy activities.

FTC officials downplayed the possibility of conflicts between their agency and the Commerce Department. Commerce has included the FTC in its privacy deliberations, and there are enough privacy issues for both agencies to tackle, said a source familiar with the FTC.

"Because we have the franchise on privacy enforcement, we will undoubtedly retain a leading voice on privacy policy," David Vladeck, director of the FTC's Bureau of Consumer Protection, said in a statement.

A new privacy coordinator in the Obama administration could be beneficial to U.S. commerce, said Justin Brookman, senior fellow at the Center for Democracy and Technology, a digital rights group. A lack of modern privacy laws puts the U.S. out of step with much of the rest of the world, in particular the European Union, causing problems for international companies trying to transport data back and forth, he said.

A privacy coordinator in the White House or Commerce Department could focus on data portability issues, he said. "The lack of regulation is really hurting us competitively," Brookman said.

Grant Gross covers technology and telecom policy in the U.S. government for The IDG News Service. Follow Grant on Twitter at GrantGross. Grant's e-mail address is grant_gross@idg.com.

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