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FTC urges privacy protections

Online companies will have to be more vigilant about protecting privacy if e-commerce is to thrive, according to the Federal Trade Commission.

Online companies will have to be more vigilant about protecting personal privacy online if electronic commerce is to thrive, according to a report released today by the Federal Trade Commission.

But experts--including those in the government, academia, privacy organizations, and private industry--have not been able to reach a consensus on exactly how that privacy should be protected, the report states. Disagreement over the issue became apparent at an FTC workshop held in June as part its ongoing effort to come to grips with privacy on the Internet and to help increase trade over the Net.

The conference was held before lawmakers started putting pressure on the FTC to come up with privacy regulations. Legislators have since called for regulation in reaction to a controversy over the Lexis-Nexis's P-Trak service, which releases some private information over the Internet to its subscribers.

With the new Congress convening, FTC spokeswoman Victoria Streitfeld said the commission will be asking for "further direction" on regulations. But this report, she added, is a much broader look at privacy issues.

Among them: what kind of information Web sites collect and how they collect it; whether Internet companies should inform consumers about information they are collecting; what kind of technology exists to protect information; and potential government regulation of privacy on the Net.

Participants generally agreed on these issues: that consumers should be informed of what information was being collected; that consumers should have some choice about whether that information be collected; that they should be offered technological security solutions; and that they should have access to their personal information that companies have collected.

However, not everyone agreed on all points. The first was an inability to agree on what exactly constitutes private information. To some marketing firms private information is only information that cannot be obtained through public records. To privacy experts, such as the Information Industry Association, personal information refers to "information relating to an individual or identifiable individual," according to the report.

Another example centered on consumers' ability to block information released about them. While all agreed it was a worthy goal, they didn't agree on how it should be accomplished.

The report discusses several technologies and standards that can be used to limit private information. But all of those rely on voluntary compliance.

"Industry representatives and trade associations took the position that it would be both inappropriate and counterproductive to mandate particular privacy protections," the report states. They said the Internet is self-policing, in that they responded to market pressure. They also argued that it is impossible to regulate the Internet because technology outpaces regulation.

But, the report went on to say, "Some privacy advocates argued that the commission should intervene promptly to protect online privacy. In their view, purely self-regulatory approaches to protecting privacy have failed."

Privacy, the report concluded, is an issue that promises to stay relevant and the FTC plans to call another workshop soon.