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White House, Consumers in Mind, Offers Online Privacy Guidelines

By , THE NEW YORK TIMES

Thu, Feb 23, 2012 at 11:59 am

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WASHINGTON — The Obama administration on Wednesday outlined a set of online privacy principles that officials said would help consumers control the use of their personal data gleaned from Internet searches.

The framework for a new privacy code moves electronic commerce closer to a one-click, one-touch process by which users can tell Internet companies whether they want their online activity tracked.

Much remains to be done before consumers can click on a button in their Web browser to set their privacy standards. Congress will probably have to write legislation governing the collection and use of personal data, officials said, something that is unlikely to occur this year. And the companies that make browsers — Google, Microsoft, Apple and others — will have to agree to the new standards.

But because those companies also are the largest competitors in the business of providing advertising to Web sites, and are part of a consortium participating in the development of the principles, administration officials said they expected the standards would give consumers privacy while also allowing electronic commerce to grow.

“American consumers can’t wait any longer for clear rules of the road that ensure their personal information is safe online,” President Obama said in a statement released Wednesday. “By following this blueprint, companies, consumer advocates and policy makers can help protect consumers and ensure the Internet remains a platform for innovation and economic growth.”

Even before Congress approves privacy legislation, the Federal Trade Commission will have the ability to enforce compliance with a code of conduct to be developed by the Commerce Department or with advertising industry guidelines that companies would adopt voluntarily, Jon Leibowitz, the chairman of the F.T.C., said during a call with reporters on Wednesday.

Companies responsible for the delivery of nearly 90 percent of online behavioral advertisements — ads that appear on a user’s screen based on browsing and buying habits — have agreed to comply when consumers choose to control online tracking, the consortium said on Wednesday.

But even if a click of a mouse or a touch of a button can thwart Internet tracking devices, there is no guarantee that companies won’t still manage to gather data on Web behavior. Compliance is voluntary on the part of consumers, Internet advertisers and commerce sites.

“The real question is how much influence companies like Google, Microsoft, Yahoo and Facebook will have in their inevitable attempt to water down the rules that are implemented and render them essentially meaningless,” John M. Simpson, privacy project director for Consumer Watchdog, said in response to the administration’s plan. “A concern is that the administration’s privacy effort is being run out of the Commerce Department.”

But Mr. Leibowitz noted that the F.T.C. had already been aggressively penalizing companies that did not adhere to their stated privacy programs. Last year it brought charges against both Google and Facebook.

“If you ask what makes businesses want to do this,” Mr. Leibowitz said, the answer is, “respecting consumer privacy and protecting data online encourages Internet commerce.”

The Digital Advertising Alliance, a group of marketing and advertising trade groups, said it had committed to following the instructions that consumers gave about their privacy choices by using Do Not Track technology already available in most Web browsers.

Stu Ingis, general counsel for the Digital Advertising Alliance, said the group hoped to reach agreement within about nine months with browser companies on standards for the use of a one-click notification of a consumer’s privacy desires.

Hardly a day goes by without some development in the expansion of privacy standards or the punishment of privacy violations. On Wednesday, California’s attorney general, Kamala D. Harris, said the state had reached an agreement with Amazon, Apple, Google, Hewlett-Packard, Microsoft and Research in Motion to strengthen privacy protections for smartphone owners who download mobile applications.

The agreement will force software developers to post conspicuous privacy policies detailing what personal information they plan to obtain and how they will use it. It also compels app store providers like Apple and Google to offer ways for users to report apps that do not comply.

The new privacy outline brings together several efforts to develop and enforce privacy standards that have been progressing for the last couple of years on parallel tracks, under the direction of advertisers, Internet commerce sites and software companies.

The next step will be for the Commerce Department to gather Internet companies and consumer advocates to develop enforceable codes of conduct aligned with a “Consumer Privacy Bill of Rights” released as part of the administration’s plan on Wednesday.

The bill of rights sets standards for the use of personal data, including individual control, transparency, security, access, accuracy and accountability.

Tanzina Vega contributed reporting from New York and Nick Bilton and Nicole Perlroth from San Francisco.

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