Clinton Urges Stronger Internet Privacy Policies

In some of his most forceful comments on Internet privacy to date, President Clinton on Friday urged companies doing business on the World Wide Web to adopt stronger policies on protecting user information and then adhere to them.

Clinton has been speaking out more on the issue in recent weeks, and he used a trip to Silicon Valley to warn that ordinary Americans are becoming alarmed about the electronic spread of personal information.

“People are worried about this. This is a big deal,” he told a small group of high-technology company executives and officials as he started a two-day California fund-raising trip. “Do you have privacy policies you’re proud of?”

Privacy advocates said that the White House was trying to navigate between the industry’s desire to regulate itself and growing calls for laws to protect consumers.

“The money may be with self-regulation, but I think the votes are with privacy legislation,” said Marc Rotenberg, executive director of the nonprofit Electronic Privacy Information Center in Washington.

More than 60% of Web sites have some privacy policy, a figure that Clinton said is not high enough. But many of those policies simply tell Web surfers that their information will be shared.

Clinton said that consumers should be offered a clear choice to stop that information transfer and should be able to dispute inaccurate information, as they do with credit reports.

As he did in his State of the Union address in January, Clinton also said that some electronic records deserve special legal protection, singling out medical and financial data and communication with children.

But his comments on the specifics of desirable privacy policies cover new ground.

“The fact he was able to dig deeper on some of the privacy concepts is a sign [that] he’s gone beyond where he was at the State of the Union,” Rotenberg said.

The speech follows on the heels of a controversy over Internet advertising firm DoubleClick’s collection of both online and catalog-shopping information and allegations that other companies have not followed their stated policies on what they do with customer information.

And Intuit, the maker of financial software, this week discovered that it has been inadvertently disclosing income and other figures on its customers to advertisers.

“Freedom requires a certain space,” Clinton said at the San Jose campus of Novell Inc., a large software firm. Citizens “are afraid they will have no place to hide.”

Clinton’s remarks suggest that further regulation of the Net, long considered anathema by most Silicon Valley leaders, could become more likely. He said that privacy fears could stunt the explosive growth of the Internet.

Opposition to legislation may be weakening in the industry as well.

DoubleClick on Thursday abandoned its plan to link data on Web surfers’ habits with their names and other data and said that it would not revive the effort “until there is an agreement between government and industry on privacy standards.”

And in Senate testimony this week on America Online’s proposed merger with Time Warner, AOL Chief Executive Steve Case said he would support some privacy bills.

“We don’t have an allergic reaction to any legislation related to privacy,” Case said. “If there’s something that really deals with the issue in a focused way, so that every consumer has the kind of basic principles of notice and choice, we would be supportive of that.”

Silicon Valley lobbying arm TechNet agreed that the DoubleClick case and other recent fights had increased the pressure for a resolution of privacy issues. But spokeswoman Ellen Stroud said the industry’s Online Privacy Alliance remains the right place for working out which policies should become standard.

Yet, Rotenberg said he was encouraged by the developments. “We may be in a penumbra of an emerging consensus,” he said.

Also on Friday, Clinton ordered his Cabinet secretaries and the heads of federal agencies to review the adequacy of their safeguards against so-called denial-of-service computer attacks, the type hackers used last month to temporarily render Yahoo, Amazon, Ebay and other Web sites inoperable.

He also instructed them to report on whether they could be sure their own computers could not be co-opted by hackers and used as part of denial-of-service attacks on others. Clinton urged private companies to take similar steps.

After evening appearances at several fund-raising events in Palo Alto and San Francisco, Clinton will fly to Los Angeles today.