By Gautham Nagesh - 12/01/10 06:55 PM EST
The Federal Trade Commission on Wednesday proposed a do-not-track list for the Web.
The proposal, which would allow consumers to opt out of having their online activities tracked, was included as part of the agency's preliminary report on consumer privacy.
The report is intended as a framework for any potential privacy legislation from Congress but stops short of explicitly calling for a legislative solution. FTC Chairman Jon Leibowitz said he would prefer for the makers of popular Web browsers to come up with an setting on their own that would allow consumers to opt out of having their browsing and search habits tracked.
"The Do Not Track browser setting would be a one-stop shop" for consumers that want to opt-out of tracking, Leibowitz said on a conference call with reporters. "Microsoft, Google, Mozilla and Apple have already experimented with this. We're going to give these companies a little more time, but we would like to see them work a lot faster and make consumer choice a lot easier."
Online privacy is widely viewed as a bipartisan issue — several lawmakers have unveiled draft privacy legislation, including House Consumer Protection Subcommittee Chairman Bobby Rush (D-Ill.), whose bill has gained the support of leading tech firms such as Microsoft, Intel and eBay despite some lingering concerns.
Do-not-call legislation targeting telemarketers in the last decade was broadly seen as one of the most popular measures approved by government in recent years.
Sen. John Kerry (D-Mass.) is also working on draft legislation aimed at strengthening online consumer privacy protections.
"The report confirms that many companies — both online and offline — don’t do enough to protect consumer privacy. Today’s technology makes it easy for companies to obtain, collect, store, and transfer unprecedented amounts of information, but industry self regulation has proven inadequate to protect consumers," Kerry said in statement.
Leibowitz said the report's recommendations are not final and that the FTC is still seeking comment, but he called the status quo unacceptable. He dismissed concerns that new online privacy guidelines would pose barriers to entry for new Web companies, pointing out the FTC has no regulatory authority.
"I don't think that's a real issue," Leibowitz said, calling the concerns "Washington folks doing what they're supposed to be doing."
The report calls for companies to bake privacy into the design of their products and to collect data about consumers only if they have a legitimate business need, such as sharing a customer's address with a shipping company. The FTC also recommended that privacy disclosures be shortened and choices be made clearer to consumers.
Advocacy groups have had mixed reactions to the recommendations.
"Kids' privacy is a huge and ever-growing issue. We commend the FTC for supporting a Do Not Track approach to online privacy and for investigating what needs to be done from a policy perspective to protect the privacy of consumers — especially kids and teens," said James Steyer, CEO of the parent advocacy group Common Sense Media.
"It is highly likely the [Do Not Track] mechanism would interfere with [the benefits of online advertising]. Furthermore, the [Do Not Track] mechanism cannot be compared to the popular Do Not Call list, which reduces unwanted marketing messages," said Technology Policy Institute President Thomas Lenard. "A [Do Not Track] mechanism wouldn’t necessarily reduce advertising messages, it just would likely make them less useful."
Leibowitz said the report is meant to offer legislative guidance to lawmakers and best practices to companies, since many do not currently disclose their online tracking practices. Even for those that do, he said, the policies are generally incomprehensible and largely ignored by consumers. He said a browser setting is the most practical way to assure consumers' privacy is protected.
"A legislative solution will be necessary if industry doesn't step up to the plate," Leibowitz said.
The FTC is holding the agency's first online Twitter chat at 3 p.m. on Wednesday to discuss the report. Those interested should follow the #FTCpriv hashtag.