FTC to Back New Online Privacy Regulations

The Federal Trade Commission is poised to recommend new regulations to protect the privacy of consumers online, reversing a long-standing position favoring industry self-regulation, sources familiar with the new initiative said. The recommendations, which are scheduled to be released Tuesday in a report to Congress, will reportedly include a request that lawmakers pass legislation that will strengthen the FTC’s hand in regulating the companies that make up the “new economy.” The FTC report is to include a new survey of online privacy practices that suggests that about 90% of the most popular Web sites now display privacy policies, far more than just a year ago, but that only 20% of sites fully comply with “fair privacy practices” devised by the FTC. But some Republican lawmakers assailed the FTC plan, saying that efforts by the industry to regulate itself are working, and that a new regulatory regime is unnecessary and could stifle the burgeoning Internet economy. FTC Chairman Robert Pitofsky said he did not favor a Draconian regulatory structure of the kind criticized by the lawmakers. “There’s a tendency to characterize this debate as self-regulation versus regulation, as if it’s going to be all of one or all of another.”