Federal Trade Commission Chairman Jon Leibowitz says that while a lot of people in Washington, D.C., spend a great deal of time considering the spending deficit, the FTC has instead focused on the “privacy deficit” facing American consumers.
To help with this lack of privacy, especially online, the FTC today released a preliminary staff report titled “Protecting Consumer Privacy in an Era of Rapid Change: A Proposed Framework for Businesses and Policymakers.”
“Technological and business ingenuity have spawned a whole new online culture and vocabulary … that consumers have come to expect and enjoy,” Leibowitz said during a conference call to discuss the report. “The FTC wants to help ensure that the growing, changing, thriving information marketplace is built on a framework that promotes privacy, transparency, business innovation and consumer choice.”
One method the FTC endorses is a “Do Not Track” mechanism that customers can use to opt out of the collection of information about their Internet activity for the development of targeted advertisements.
FTC representatives said the most practical method would most likely involve the placement of a persistent setting, similar to a cookie, on the consumer’s browser signaling the consumer’s choices about being tracked and receiving targeted ads.
“A ‘do not track’ browser setting would serve as an easy, one-stop shop for consumers to express their choices, rather than on a company-by-company or industry-by-industry basis,” said Leibowitz, adding that a coalition of organizations that includes Microsoft, Google, Mozilla and Apple has experimented with such a setting.
Other recommendations presented by the FTC to enhance consumer privacy include:
- Companies should build consumer privacy protections into their everyday business practices, including security for consumer data, limited collection and retention of that data, and procedures to promote data accuracy.
- Consumers should be presented with choices about the collection and sharing of their data at the time and in the context of which they are making decisions, rather than “after having to read long, complicated disclosures that they often cannot find.”
- Allowing consumer access to the data that companies maintain about them, “particularly for nonconsumer-facing entities such as data brokers.”
The FTC is seeking public comment on the report now through Jan. 31, and will issue final recommendations next year after working with stakeholders to refine and implement the policy recommendations.
“At this point we are making recommendations for best practices,” Leibowitz said. “We are putting this out for comment — we want feedback, then we will move forward.”
Leibowitz added, however, that at least from his perspective, “a legislative solution will surely be needed if industry does not step up to the plate.”