FTC Backs 'Do Not Track' Option to Protect Online Privacy

a man looks into a computer - online privacyA Federal Trade Commission report addressing the protection of consumer privacy online offered a number of recommendations, including the adoption of a "Do Not Track" option for Web browsers.

The FTC says the report, Protecting Consumer Privacy in an Era of Rapid Change: A Proposed Framework for Businesses and Policymakers, seeks to balance the need for consumer privacy with the development of Web-based products and services, which often rely on the use of data gleaned from online consumer behavior.

The proposed "Do Not Track" mechanism entails a Web browser option that would allow consumers to choose whether to allow businesses to monitor their online searching, browsing and shopping habits."Technological and business ingenuity have spawned a whole new online culture and vocabulary -- email, IMs, apps and blogs -- that consumers have come to expect and enjoy," said FTC Chairman Jon Leibowitz in a statement. "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."

The report found that the industry efforts to safeguard consumer privacy through self-regulation have "failed to provide adequate and meaningful protection." The framework outlined in the report, the FTC says, is designed to reduce the burdens on consumers and businesses alike.

"We deserve far better from the companies we entrust our data to," Leibowitz said during a conference call, citing software maker EchoMetrix, which just settled charges with the FTC for selling information it gathered about the online activities of children, a practice whose disclosure was buried in reams of fine print.

Leibowitz also promised aggressive action by the FTC against other companies that abuse the privacy of consumers. "We will take action against companies that cross the line with consumer data and violate consumers' privacy -- especially when children and teens are involved."

Most consumers, the report notes, are oblivious to technological advances that permit rapid collection and sharing of their data. And most privacy policies posted on company websites are lengthy, legalistic documents virtually guaranteed to be ignored or misunderstood by consumers.

Since current privacy policies place an unreasonable burden on consumers, the report recommends companies "adopt a 'privacy by design' approach by building privacy protections into their everyday business practices." These protections should include reasonable security for consumer data, limited collection and retention of such data, and procedures to promote data accuracy.

The report also suggests consumers should be presented with choices about collection and sharing of their data when and where they face such decisions online -- rather than forcing them to wade through endless, complicated disclosures they often can't locate.

The "Do Not Track" proposal involves a simple, easy-to-use browser option that allows consumers to opt-out of the collection of information about their online behavior for targeted ads. The report suggests a setting, similar to a cookie, on the consumer's browser signaling the consumer's choices about being tracked and receiving personalized ads.

David Vladeck, Director of the FTC's Bureau of Consumer Protection, testified Thursday on "Do Not Track" legislation before the House Committee on Energy and Commerce Subcommittee on Commerce, Trade and Consumer Protection.

The report also recommends standardized privacy policy notices so consumers can compare practices of various companies; allowing consumers "reasonable access" to the data that companies maintain about them, including data brokers; and an effort to educate consumers about commercial data practices and the choices available to them.

Public comments on the report will be accepted until January 31, 2011. To file a public comment electronically, click here and follow the instructions.

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