In July, members of the Federal Trade Commission and industry appeared before the subcommittee on Telecommunications Trade and Consumer Protection of the House committee on Commerce at an oversight hearing regarding Electronic Commerce: Current Status of Privacy Protections for Online Consumers. At this hearing the FTC released a report reviewing the findings of the two surveys previously discussed. The report is entitled, Self-Regulation and Online Privacy: A Report to Congress. Page down to July 13, 1999, Self-Regulation and Privacy Online: A Federal Trade Commission Report to Congress. The report is in pdf format.)
In testimony before the committee, the Chairman of the FTC, Robert Pitofsky, paraphrased the reports’ conclusions that the electronic commerce industry has made great strides in the implementation of consumer privacy protection, but that fair information practices are by no means uniform among commercial web sites. In essence, the FTC is still committed to industry self-regulation, but is prepared to take a greater role if necessary. (The full text of the Chairman’s remarks can be accessed here. Commissioner Sheila Anthony concurred with the conclusions of the report, but was dismayed by the small number of Web sites, as evidenced by the GIPPS and OPA surveys, that adhere to the fair information practice principles of “notice, consent, access, and security.” In contrast to the majority, she advocates legislative action since the industry is not moving quickly enough to protect the privacy rights of consumers. (Commissioner Anthony’s remarks; the testimony of all hearing attendees.)
Self-Regulation and Online Privacy: A Report to Congress
Chairman, FTC, Robert Pitofsky’s remarks
FTC Commissioner Sheila Anthony’s remarks
| Press release on S. 809, the Online Privacy Act of 1999
Bill status and summary of H.R. 1685
Testimony of Deirdre Mulligan from the Center for Democracy and Technology
CDT Report, Behind the Numbers: Privacy Practices on the Web
Sen. McCain’s press release on privacy legislation
Senate Hearing on Privacy on the Internet
At the end of July, Sen. Burns (R-Mont.), the Chairman of the subcommittee on Communications of the committee on Commerce held a hearing entitled, Privacy on the Internet. The hearing was to examine the 1999 FTC report and S. 809, the Online Privacy Protection Act of 1999, which Sen. Burns introduced together with Sen. Wyden (D-Ore.) in April, 1999. (For a press release on S. 809, please go to: http://www.senate.gov/~burns/p990415a.htm. To see the Table of Contents of S. 809, go to: http://thomas.loc.gov/cgi-bin/query/z?c106:S.809:) Sen. Burns believes that privacy remains a major obstacle to the expansion of e-commerce. The intent of S. 809 is to provide consumers with some control over the personal information collected over the Web by granting them the “right of refusal” – denying the site permission to utilize the collected information. (Title III of H.R. 1685, by Rep. Boucher (D-Va.), has online privacy protection provisions which would mandate all web sites to post disclosure policies and inform the consumer as to third party usage of collected information. (For the bill summary and status information on the bill, please go to: http://thomas.loc.gov/cgi-bin/bdquery/z?d106:h.r.01685:)
Also present at this hearing was Ms. Deirdre Mulligan from the Center for Democracy and Technology. (Ms. Mulligan’s testimony is at: http://www.cdt.org/testimony/mulligan072799.shtml.) The CDT took this opportunity to release their report entitled, Behind the Numbers: Privacy Practices on the Web, which reviews privacy expectations, the GIPPS survey and private sector privacy mechanisms (such as TRUSTe). The report concludes that individual concerns about privacy are not being fully addressed by the industry and adherence to the principles of fair information is the exception and not the rule. (The report can be accessed at: http://www.cdt.org/privacy/. Go to the headline, CDT issues report on privacy seals and privacy practices online and click on “report.”)
At the hearing, the Chairman of the Senate Commerce committee, Sen. McCain (R-Ariz.), indicated he is in agreement with the FTC that privacy legislation is not presently necessary. That angle is not to be foreclosed, however, and Congress will step in if self-regulation falters. He also noted that the FTC will be updating their privacy report every six months as part of the ongoing oversight effort. (Please see Sen. McCain’s press release on the hearing at: http://www.senate.gov/~mccain/intpriv.htm. All of the testimony, including that of the Chairman, can be accessed at: http://www.senate.gov/~commerce/issues/telco.htm.)
Other Privacy Initiatives
There is no lack of industry concern over privacy. Internet industry groups and companies, such as the Council for Internet Commerce (CII), TRUSTe, NetCoalition.com and Zero-Knowledge have either developed guidelines for best electronic business practices or products which the consumer can use to protect their privacy online. The CII , which is a coalition of 100 industry executives and community leaders, has unveiled a set of industry guidelines, the Standards for Internet Commerce, in an effort to promote a standard set of practices for privacy and other online consumer concerns.
TRUSTe is a nonprofit organization which was launched in 1997 with the express purpose of building consumer trust and confidence in e-commerce. TRUSTe acts in an oversight capacity for those Web publishers which abide by their fair information practices (the TRUSTe “seal”). (For TRUSTe’s testimony before the House Judiciary committee in July 1999, please click here.
Zero-Knowledge Systems, Inc. provides a service which utilizes encryption and independent servers to create “online pseudonyms” for the user. When using the Freedom Net service a user can surf the Web without personal intrusion. (For more information on Zero-Knowledge, please go to: http://www.zeroknowledge.com/company/.)
On a final note, it looks as if the public is in for more reports regarding online privacy. An amendment added to the recently approved “Networking and Information Technology Research and Development Act” (H.R. 2086), includes funding for a study on online privacy protection which is to be conducted by the National Science Foundation and the National Academy of Science’s Research Council. Amid the fanfare surrounding all the surveys, reports and studies stands the consumer, who knows not where to turn. Right now the tide seems to be on the side of industry self-regulation, but as they have been warned, that is contingent on good behavior. Tune in next year?
| Council for Internet Commerce (CII) Draft Standards for Internet Commerce
TRUSTe’s testimony before the House Judiciary Committee, July 1999