- Associated Press - Thursday, December 16, 2010

The Commerce Department is calling for the creation of a “privacy bill of rights” for Internet users to set ground rules for companies that collect consumer data online and use that information for marketing and other purposes.

The proposal, outlined in a report Thursday, is intended to address growing unease about the vast amounts of personal information that companies are scooping up on the Internet - from Web-browsing habits to smart-phone locations to Facebook preferences. That data is often “mined” to target advertising.

The new report is intended to guide lawmakers, industry and a White House group looking at the issues surrounding Internet privacy.

It comes two weeks after the Federal Trade Commission recommended the creation of a “Do Not Track” tool to let consumers stop or restrict advertisers from studying their online activity - including the websites they visit, the links they click, their Internet searches and their online purchases - in order to target ads.

The Commerce Department report proposes the creation of a broad framework for industry behavior to ensure that companies give consumers clear notice about what personal data they are collecting and exactly how they are using the information.



It would require companies to give consumers the opportunity to “opt out” of some or all of that data collection and to correct errors in the information. And it would set clearer limits on the use of this information and require companies to secure the data they gather.

These so-called “fair-information principles” would require congressional action to become binding. At least one key lawmaker, Senate Commerce, Science and Transportation Committee Chairman John D. Rockefeller IV, West Virginia Democrat, said Thursday that he supports such legislation.

The Commerce Department report also envisions specific codes of conduct for particular types of companies, such as social-network sites; services that deliver location-based pitches to mobile devices; and Web publishers and marketers who target ads based on a consumer’s online behavior.

Those codes of conduct would be voluntary, but enforceable. The FTC could take actions against companies that commit to abide by them and then don’t comply.

In what could become one of the more contested elements of the Commerce Department proposal, the codes would be developed by Internet advertising networks, Web publishers and marketers, social-networking sites and other online services, as well as government officials, consumer groups, privacy watchdogs and others concerned about Internet privacy.

The report recommends the formation of a federal privacy office inside the Commerce Department to bring the various interested parties together to hammer out the new codes of conduct.

While the proposal to create such an office signals that the Obama administration is elevating the importance of Internet privacy, the decision to place it inside Commerce has alarmed some privacy watchdogs.

They complain that the department is more concerned about protecting corporate interests than with consumer needs - as evidenced by its willingness to let the industry help write the new rules.

“Having the Commerce Department play a role in protecting privacy will enable the data-collection foxes to run the consumer-privacy henhouse,” said Jeff Chester, executive director of the Center for Digital Democracy, a privacy group.

Meanwhile, the Interactive Advertising Bureau, which represents the online advertising business, praised the new Commerce Department report for recognizing the importance of including the industry in developing rules to safeguard consumer privacy online. IAB added that the report validates the industry’s own efforts at self-regulation.

The Commerce Department report does not take a position on the FTC’s “Do Not Track” proposal, which is at the center of a debate over how to give consumers more control over their online information. The tool would most likely take the form of a browser setting that would let consumers signal to websites that they do not want to be tracked or want only limited tracking.

Although privacy watchdogs have welcomed the FTC proposal, the online advertising industry has warned that allowing consumers to turn off all online tracking could have unintended consequences because tracking is used to deliver all sorts of personalized Web content - from sports scores to stock prices - and not just for Internet ads.

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