Study Says Internet Firms Ignore Privacy Guidelines

Relatively few companies on the World Wide Web follow government privacy guidelines by telling users of the vast computer network how personal information is collected and used, according to a government survey of 1,400 sites.

The study by the Federal Trade Commission, due to be released Thursday, is the first major assessment of how marketers have responded in the year since the Clinton administration called for self-regulation of the Internet.

The White House had hoped the vast majority of companies would have developed policies by now on how to handle names, addresses, credit card numbers and other information gathered from people who do business on or register at Web sites. Under the guidelines, companies should notify consumers about how information is gathered, give them a choice about how it is used and make sure information is secure.

But the widespread lack of compliance has annoyed some White House officials, who warn the findings may prompt Congress to approve legislation that could stymie commercial activity on the network, an official there said.

Several people familiar with the report said the FTC probably will recommend tough new restrictions on companies that collect data about children without a parent’s permission. That would be one of the biggest steps to regulate business on the Internet to date.

More general rules for all companies could also be developed this summer unless marketers develop a credible program for self-regulation, according to Ira Magaziner, senior advisor to President Clinton for policy development.