New FTC Panel Will Be Web Privacy Watchdog

WASHINGTON - In what could be the first step toward broad regulation of online privacy, the Federal Trade Commission has announced the formation of an advisory committee to study the handling of private data by commercial firms over the Internet.

"We hope to engage a broad range of parties to give us advice," says David Medine, the FTC staff member who will chair the new Advisory Committee on Online Access and Security. "Everyone agrees on the general principle that everyone should have access to their secure information. The question is, how do you apply the principle?" Medine says that the committee will do a cost-benefit analysis to determine the steps commercial sites should take to offer access to consumers.

The topic is increasingly important, as technological advances let Internet ad server companies like Engage and DoubleClick to closely monitor the habits of Web surfers and build detailed profiles of their electronic habits. In October, the FTC handed down stringent regulations governing the use of private information about children. But the commission is still fence-sitting on the larger question of safeguarding adult privacy. So far, the commission is taking a wait-and-see approach while it lets commercial Web sites police themselves.

"The access issue is particularly contentious," says Deidre Mulligan, a spokesperson for the Center for Democracy and Technology, a Washington policy think tank. "We're interested in helping the FTC wrestle with these issues."

The industry is trying to stave off government regulation with efforts like the Network Advertising Initiative, which gives consumers notice of what information is collected and how it's used, along with a chance to "opt-out" of having their information used for certain purposes.

"The FTC's effort is absolutely consistent with the self-regulatory principles that DoubleClick and the NAI have been advocating," a DoubleClick spokeswoman says. "We look forward to working with the commission."

But self-regulation isn't good enough for privacy advocates, who warn of Orwellian scenarios stemming from invisible data collection. The advocates point to what they say is the hypocrisy of an ad server industry which promises to be judicious with private information, even as it boasts of its prowess in tracking Web surfers for its clients, as proof that more government regulation is needed.

The FTC has drawn fire from privacy advocates for doing too little to police the industry. The Electronic Privacy Information Center, one of the FTC's leading critics on the issue, filed a lawsuit against the commission in October to force it to produce its records on consumer privacy complaints.

The new privacy committee, which will have about 30 members, will study the mechanics of giving consumers access to their personal data, and will try to set standards for evaluating security measures taken by Web sites. Medine says the FTC will also survey commercial Web sites next spring to evaluate privacy practices.

Mulligan says the CDT will nominate at least one person from its staff to join the committee, which will hold a series of public meetings at FTC headquarters early next year before submitting a report to the FTC by May 15.

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