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FTC to consider stricter online privacy rules

By Grant Gross
December 7, 2009 03:33 PM ET

IDG News Service - The U.S. Federal Trade Commission plans to take a hard look at how it enforces consumer privacy standards in the coming months, with new rules for online companies possibly on the way, the agency's chairman said on Monday.

With advances in computer technology, online companies are able to track Web users and store personal data at increasingly lower costs, and the FTC will pay increased attention to online privacy concerns over the next six months, FTC Chairman Jon Leibowitz said during an agency workshop on privacy Monday.

"We're at another watershed moment in privacy, and the time is right for the commission ... to take a broader look at privacy," Leibowitz said. "Companies can store and chunk massive amounts of data relatively cheaply."

Web users often have little understanding about what personal data online companies and advertising networks are collecting, and how they are using the data, Leibowitz said. "How many consumers ... have ever heard the names of the many ad networks that end up with their information in the process of targeting ads?" he said. "How many people understand the networks' role?"

Online companies are also grappling with how to best protect privacy, Leibowitz added. Earlier this year, retailer Sears settled an FTC complaint that it tracked the secure Web transactions of customers invited to join a shopping research club, he noted.

"Nobody argues that the folks at Sears are bad people who wanted to do bad things with the information," he said. "To the contrary, they probably didn't know exactly what they expected to learn from this data. That just demonstrates, however, that all of us are still feeling our way around what respecting privacy really means."

Monday's workshop was the first of three exploring privacy that the FTC has planned in the coming months. The FTC doesn't yet know what it will do with the information it collects at the workshops, Leibowitz said. The FTC has so far focused on requiring online companies to give customers notice and choice about data collection and on bringing complaints when customers have been harmed, but those approaches "haven't worked quite as well as we would have liked," he said.

The FTC will look for ways to enforce privacy standards that are "better for consumers and fair to businesses as well," he said.

Some U.S. lawmakers have also talked about introducing comprehensive privacy legislation by early next year.

Others at the workshop argued that new rules aren't needed. While some surveys have suggested Web users value their privacy, in practice, they often trade away some privacy for small benefits, said Adam Thierer, president of the Progress and Freedom Foundation, a free-market think tank.

Reprinted with permission from IDG.net. Story copyright 2014 International Data Group. All rights reserved.
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