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'Do-Not-Track', Opt-In Web Privacy Gains Momentum

By Brendan B. Read
Senior Contributing Editor

Consumers and customers it appears, want to be and are increasingly in charge of not only their interactions with firms but also with their data that these companies collect, witnessed by the blanket do not call, do-not-e-mail and now opt-in-focused privacy legislation.

Supplying more evidence of that are possible new regulatory initiatives and bills that are in the works in Congress.

*          The Hill  reports that the Federal Trade Commission (FTC (News - Alert)) is looking at making “do not track” list for online advertising, similar to the FTC do not call list “do not call” list for telemarketers, according to the agency’s chairman Jon Leibowitz (News - Alert). The paper said “the FTC plans to release a report on online privacy before the end of the year that may include information on whether “do not track” seems viable.”

“Such a program would be designed as a “universally easy-to-use mechanism for consumers that would run through the FTC or could be run through some sort of private entity,” the Hill quoted FTC chair Jon Leibowitz said at a Senate Commerce Committee hearing on online privacy. “It’s, sort of, one thing we’re focusing on.”

*          Rep. Bobby L. Rush (D-Ill.), chair of the Subcommittee on Commerce, Trade, and Consumer Protection, introduced in late July The Best Practices Act of 2010 (H.R.5777) aimed at improving consumer protection online and offline.

The bill, if passed, would require companies to obtain opt-in consent to disclose information to a third party; the term, "third party" would be defined based on consumers' reasonable expectations rather than corporate structure. It would in turn establish a safe harbor that would exempt companies from the opt-in consent requirement, provided those companies participate in a universal opt-out program operated by self-regulatory bodies and monitored by FTC. 

The bill would also require companies that collect personal information to disclose their practices with respect to the collection, use, disclosure, merging, and retention of personal information, and explain consumers’ options regarding those practices. Firms would also have to provide disclosures of their practices in concise, meaningful, timely, and easy-to-understand notices, and direct the FTC to establish flexible and reasonable standards and requirements for such notices.  They would in addition have to have reasonable procedures to assure the accuracy of the personal information they collect. Consumers would be empowered to correct or amend certain information. 

*          In May Reps. Rick Boucher (D-Va.), Chair of the Subcommittee on Communications, Technology, and the Internet, and Cliff Stearns (R-Fla.), ranking subcommittee member, released a discussion draft of legislation to assure the privacy of information about individuals both on the Internet and offline.

The draft measure would protect individuals’ privacy by requiring corporate disclosure of privacy practices, allow opt-out of information collected on them (which would also apply when a website relies upon services delivered by another party to effectuate a first party transaction) and opt-in collect sensitive information about them. This last section, akin to the European Union’s Data Protection Directive covers data that relates to an individual’s medical records, financial accounts, Social Security number, sexual orientation, government-issued identifiers and precise geographic location information. Opt-in would also be demanded of firms seeking to share individuals’ personally-identifiable information with unaffiliated third parties.

The direct marketing industry is understandably concerned. Rep. Boucher for example is the architect of CAN-SPAM. He also applauded Rep. Rush’s bill.

Jerry Cerasale, Direct Marketing Association senior vice president-government affairs told DM News: “Any ‘do not' national list doesn't work and undermines the basis of the Internet as we know it now, in terms of free content and companies being able to monetize the Internet.”

DM News also reported that industry is planning to fight the Boucher-Stearns draft. NetChoice, an industry coalition counting AOL (News - Alert), eBay and Yahoo among its members, “said the draft would violate the First Amendment”, while DMA executive vice president-government affairs Linda Woolley “said it would “pretty much kill direct marketing as we know it.”