FTC Reports No Need for Net Privacy Law

Few commercial Web sites follow “fair information practices” to protect the privacy of Web surfers, but no new laws are needed now, the Federal Trade Commission will tell Congress today.

The report, obtained Monday by Reuters, showed that although the four-member FTC approved the report, two commissioners dissented in part.

“Many online companies now understand the business case for protecting consumer privacy,” said the report. But it added: “The implementation of fair information practices is not widespread among commercial Web sites.”

Nonetheless, the report said: “Legislation to address online privacy is not appropriate at this time.”

The House Commerce telecommunications subcommittee, chaired by Republican Rep. W.J. “Billy” Tauzin of Louisiana, was to get the report this morning, including an oral summary from FTC Chairman Robert Pitofsky.

The report deals with the question of what happens when a person visits a Web site.

Some information is collected automatically about which sites are visited, and other information is provided knowingly. But in most cases, Web sites do not tell consumers what information is gathered or what happens to it.

One member of the Federal Trade Commission questioned whether the report went too far and a second was concerned it did not go far enough.

Commissioner Orson Swindle said the report reached the correct conclusion--that no additional laws are needed--but understated the “substantial progress attributable to industry self-regulation.”

Commissioner Sheila Anthony disagreed and said progress was far too slow, citing survey results showing that 93% to 99% of sites collected personal information but only 10% to 20% had privacy statements.

Said Anthony: “I believe the time may be right for federal legislation to establish at least baseline minimum standards.”

The report cited a number of industry efforts to protect consumer privacy, including TRUSTe, sponsored by the CommerceNet Consortium and the Electronic Frontier Foundation; BBB OnLine, sponsored by the Council of Better Business Bureaus; and CPA WebTrust, sponsored by the American Institute of Certified Public Accountants.

The programs are designed to make certain that Web sites notify surfers of the information they gather, and in some cases have outside firms verify that the information is only used as promised.

The FTC was encouraged by the existence of such efforts, even though few sites use them.

It noted that some firms, such as Walt Disney Co., have said they will not advertise on sites that fail to carry out fair information practices.