The other shoe finally dropped. The Federal Trade Commission, which has already reached limited, individual settlements with Google and Facebook over privacy, called on Congress to be ready to pass broad legislation governing the collection and use of consumers' data.
As anticipated, the centerpiece of the FTC's proposals is a "Do Not Track" system. In a new report, "Protecting Consumer Privacy in an Era of Rapid Change," the agency encouraged Internet companies to have "Do Not Track" buttons in place on a voluntary basis by the end of the year.
In other guidelines, the FTC says that companies should build privacy controls into every stage of the development of online products and should offer greater transparency to consumers about the data collected. The FTC excludes companies collecting -- and not transferring -- small amounts of nonsensitive data from the framework.
Without legislative teeth, of course, the report remains no more than a guide to best-practices. The online enterprise is generally hostile to "Do Not Track," with one company official describing it as "death for online advertising." The FTC insists, however, that there will be congressional support for mandatory "Do Not Track" if companies do not move swiftly to introduce a system voluntarily.
Enterprise fears are not baseless but may well be exaggerated. Telemarketing was impacted by the FTC's introduction of a national "Do Not Call" registry, but the industry was not decimated, as had been feared. The FTC has emphasized that "Do Not Track" means just that -- it doesn't mean "Do Not Advertise."
Under the FTC guidelines, would consumers lose the use of Websites and apps that offer free access in return for data collection? Not necessarily. Even if opting-in becomes the default setting for sites and apps under a voluntary or mandatory "Do Not Track" system, there would be nothing to prevent consumers from willingly -- and knowingly -- giving up privacy in return for products and services.
While it's possible that the issuance of this report will have the intended effect of bringing Internet enterprises to the bargaining table to devise a self-regulatory framework, with the FTC retaining the threat of its enforcement powers under the FTC Act, that result is far from guaranteed. If the example of Google is anything to go by, arrogance in the face of regulatory initiatives is considered a viable default position.
Congressional action may be a necessary resort, but the prospect provides scant comfort for consumers. Senators are divided over such an apparently uncontroversial idea as enhancing the cybersecurity of the national infrastructure. The FTC may be all too complacent in thinking that Capitol Hill will do its bidding on consumer privacy, especially if Internet giants mobilize their growing lobbying power. It's sure to be a bumpy ride, whatever the outcome, but at least the FTC is steering in the right direction.
— Kim Davis , Community Editor, Internet Evolution