The Federal Trade Commission on Thursday called for legislation requiring companies to get parental consent before permitting children under 13 to enter World Wide Web sites that solicit addresses, phone numbers and other personal information.
An FTC study of 1,400 Web sites in March showed that while 89% of 212 children's sites surveyed collect personal information, only 54% tell consumers how that information is used. Less than 10% of the children's sites took steps to gain parental consent, the study found.
Overall, the study showed that 85% of Web sites collect personal information from consumers and only 14% disclose how that information will be used.
"The failure of self-regulation is particularly disturbing so far when it comes to children," FTC Chairman Robert Pitofsky said. He called on Congress to "develop legislation that puts parents in control of the collection of information."
The FTC also may propose new regulations in coming months regarding broader issues of privacy on the Internet, Pitofsky said. "I think there is a need for broader recommendations. We felt we were not ready to make those proposals." He declined to cite specific privacy issues the FTC will address.
The FTC plan comes amid growing concern in the White House and Congress that personal privacy could be threatened by increased use of electronic computer networks such as America Online.
The FTC report "makes it clear that the industry, as a whole, still has a long way to go," said George Vradenburg, AOL's general counsel. "We hope that Web sites will use this report as a catalyst to post privacy policies, give consumers the tools they need to make informed choices, and stop the collection of personal information about children without parental consent."
"These sweeps [by the FTC] will be a major catalyst to prove to business that protecting consumer privacy is a necessary part of Internet commerce," said Brian O'Shaughnessy of the Interactive Services Assn., a trade group for Internet service providers. "It is our core belief that a well-guided global industry in conjunction with strong existing laws will meet consumer privacy expectations."
Legislation already introduced by Rep. Edward Markey (D-Mass.) would impose tougher privacy requirements on the industry. Markey said in a statement Thursday that the FTC report shows "industry self-regulation alone has been insufficient." He said he supports the FTC's plan to improve the online privacy of children.
The Center for Democracy and Technology, a civil liberties policy group, said the FTC proposal is inadequate and that the agency should "immediately commence regulatory proceedings to establish enforceable rules of the road to protect the privacy of all Americans online."