White House unveils 'privacy bill of rights'

The White House announced a set of principles for protecting consumers' privacy online Thursday and promised to work with Congress to enact them into law.

The guidelines, dubbed a "Privacy Bill of Rights," spell out how Web companies should handle user information.

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The White House declared that consumers have a right to control what data organizations collect from them and how they use it. Companies' privacy policies should be easy to understand and companies must protect user data from hacking and leaks, the principles state. 

“American consumers can’t wait any longer for clear rules of the road that ensure their personal information is safe online,” President Obama said in a statement.

The outline says consumers have a right to "reasonable limits" on the collection of their personal data and a right to access the data that companies have gathered on them.

The principles are not legally enforceable, but the administration urged Congress to enact them into law.

“As the Internet evolves, consumer trust is essential for the continued growth of the digital economy," Obama said in the statement. "That’s why an online privacy Bill of Rights is so important.  For businesses to succeed online, consumers must feel secure. By following this blueprint, companies, consumer advocates and policymakers can help protect consumers and ensure the Internet remains a platform for innovation and economic growth."

The administration also touted a commitment from advertising groups to create a "Do Not Track" button on Web browsers that will allow users to opt out of online tracking with a single click.

The Digital Advertising Alliance, which represents most online advertising companies including Google, Yahoo, Microsoft and AOL, promised to work with the major Web browsers to implement the "Do Not Track" feature, likely within the next 9 months. 

By clicking the button, users will prevent all advertisers who have agreed to the rules from collecting data about them, except for certain information to prevent fraud.

The White House said the National Telecommunications and Information Administration (NTIA), an agency within the Commerce Department, will lead negotiations between privacy advocates and Web companies to establish a detailed industry code of conduct based on the Privacy Bill of Rights.  

Although the code would be voluntary, the Federal Trade Commission could file charges against any company that agreed to the standards and then violated them.

“It’s great to see that companies are stepping up to our challenge to protect privacy so consumers have greater choice and control over how they are tracked online," Federal Trade Commission Chairman Jon Leibowitz said. "More needs to be done, but the work they have done so far is very encouraging.”

The announcements come as Web companies like Google and Facebook are under increasing scrutiny for how they collect and handle information about their users. Both companies offer their services for free but generate revenue by targeting advertisements at users based on personal information such as their online activity.

Google in particular has faced complaints from privacy advocates in recent weeks for its plan to begin sharing user information across its services, such as YouTube and Gmail.