The FTC's action to recommend legislation to Congress had been expected today, but the fate of any online privacy bill remains uncertain, especially as an administration change approaches.
Based on the FTC's recent survey that found only 20 percent of Web sites in a random sample to be in compliance with its standards of fair information practices, the commission asked congressional members to introduce legislation that will require companies to comply with those standards.
The standards include four requirements. Web sites would have to: provide a notice of information practices; offer options to consumers as to how their information is used; offer reasonable access to the information a Web site has collected about them; and take security measures to protect information that is collected from consumers.
Legislation introduced Tuesday by Sens. Ernest Hollings, D-S.C., and John Rockefeller, D-W.Va., addresses some of the FTC's major principles of fair information practices. But the passage of a bill is considered unlikely this year, and some consider that a relief.
"I don't think a bill is going to pass this year because it's fairly late and complicated," said commissioner Thomas Leary. "(In) some ways I think it's probably just as well that a bill doesn't pass this year because...the pressure of the election year and the short cycle may not lead to the best consideration and deliberation of a bill."
Leary expressed his partial dissent from the FTC's recommendation for legislation, saying that the FTC's proposal was too narrow because "any legislation should apply to offline commerce as well." Leary said that regardless of who is elected next year, he would like to see a bill that pays "serious attention" to disclosure in a way that is "evenhanded between the online and the offline world."
Commissioner Orson Swindle, who also expressed dissent from the FTC's recommendations, said that even though a bill passing this year doesn't have a chance, he would like to see a continuation of the improvement of industry self-regulation.
"The marketplace will work faster than will government regulation and probably will do a lot less harm," Swindle said, adding that privacy is going to be an emotional issue for a long time to come.
"I would like to see less emotion and less politics involved...the drumbeat for emotion has been beaten to the point where we got a lot of people concerned," Swindle said. "Now we're trying to have a political solution made in a political year, and that's a terrible thing for us to do because usually we won't do it right."
Commissioners Robert Pitofsky, Sheila Anthony and Mozelle Thompson favor government legislation, which Pitofsky called "necessary to protect consumer privacy" because "industry alone have not been sufficient."
Democratic presidential candidate Al Gore's philosophy on Internet privacy has been to encourage the industry to regulate itself, said Gore's spokesman Todd Webster.
"If new legislation is not needed because the Internet can regulate itself, then obviously it's much a preferable way to go about this," Webster said. "If that's not happening and companies are not protecting consumers' privacy, then some legislation will be called for."
Webster added that the person Gore appoints to be the next head of the FTC will be someone who continues to have a dialogue with the private sector on improving the quality of privacy policies.
Scott McClellan, spokesman for Republican candidate George Bush, said that although it's early to speculate on who will be the next head of the FTC, Bush recognizes Internet privacy to be an important issue.
"He shares concerns of consumers about personal privacy being increasingly at risk on the Internet," McClellan said.
When asked whether Bush intends to have a self-regulatory approach if elected into the White House, McClellan said that Bush will talk about it in the near future, adding, "There are a number of efforts of the industry to address these consumer concerns, and he is committed to making sure we protect the personal privacy of all individuals."
At the hearing, the commission abandoned its previous agenda of corporate self-regulation and proposed new privacy laws to protect consumers.