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FTC calls for industry self-rule

A new Federal Trade Commission report to Congress calls for industry self-regulation, rather than legislation, to protect consumers' privacy online.

The Federal Trade Commission today released a report to Congress that calls for industry self-regulation, rather than legislation, to protect consumers' privacy online.

The report quickly drew fire from electronic privacy groups such as the Electronic Privacy Information Center (EPIC), which said the guidelines lacked any enforcement "teeth," while the reference-services industry, including Lexis-Nexis, praised the call for no legislation. The long-awaited report stems from workshops held this summer in Washington to address the privacy concerns of consumers.

The report comes in the wake of another report by the FTC, which said that numerous online children's sites seem to be ignoring guidelines set by the organization regarding the collection of personal data from young surfers.

Through the use of computers and the Net, vast amounts of personal information about consumers--including Social Security numbers, birth dates, financial records, and mothers' maiden names--can be accessed through a simple search.

According to the report, the reference-services industry agreed to voluntarily enforce the following guidelines:

  • They will not distribute to the public information such as Social Security numbers, mothers' maiden names, birth dates, credit histories, financial histories, medical records, unlisted telephone numbers or addresses, or any information about children.

  • These look-up services may not let the public run searches using a Social Security number as a search term.

  • They will let consumers obtain access to nonpublic information maintained about them and "opt out" of the nonpublic information distributed to the general public.

    The services also must undergo an annual compliance review by a third party, the results of which will be made public.

    "The information industry's self-regulatory program will go a long way to address these concerns and lessen the risk that these services will be misused," said FTC chairman Robert Pitofsky. The commission vote to authorize the report's release was 4-0.

    The FTC cautioned, though: "Certain important issues regarding consumers' access to public information obtained or compiled by the look-up services remain, however. The commission is concerned that individuals have no way of discovering or correcting errors that may have occurred in the compilation of this information."

    Lexis-Nexis praised the FTC for its report. "The agency's conclusion that Congress does not need to introduce legislation speaks volumes about what can be achieved when the public and private sectors work together," said Tim Davies, chief operating officer of national information services at Lexis-Nexis, in a statement.

    But EPIC disagreed. "The FTC has decided instead to endorse industry guidelines that lack enforcement and provide no legal rights for aggrieved parties," the group said in a statement.