FTC will back online privacy groups

An FTC representative here at Internet World said complaints sent by organizations that dole out privacy seals -- including TRUSTe and BBBOnLine -- would be sent immediately to investigators rather that going through the general complaint process.

David Medine, associate director for financial practices at the FTC's bureau of consumer protection, said the policy would give more clout to the groups' seals of approval as more and more consumers become aware of Web-related privacy concerns.

He also said it would help the enforcement of privacy policies.

Doing the right thing?
"It's great for companies to say they're going to do the right thing," Medine said. "The question is, are they doing the right thing?"

Medine made the announcement during a panel on online privacy during Internet World here. Other panelists, including former Federal Trade Commissioner Christine Varney, urged companies to post clear privacy policies that disclose how they plan to use information, give users a choice in how their information is used and give visitors a method of resolving possible privacy violations.

Varney said failing to inform users how their information is used can be a public relations nightmare, citing the recent case of Geocities, which was accused of illegally disclosing personal information last year and eventually settled with the FTC. "People have a right to know what information you collect about them and what you do with it," she said.

Keep self-regulating
The panelists also said the industry should continue to regulate itself if it wants to stave off state and federal regulation. On Wednesday, the House passed a bill that cuts off federal highway funds to any state that sells your image -- a response to the sale of DMV pictures in some states. The Senate still has to consider the legislation.

But Varney doubts sweeping privacy restrictions on companies will hit the books anytime soon.

"Without a specific catastrophe, I'd say it's unlikely you'll see specific broad-based privacy legislation," she said. The next big issue, she and other panelists said, would be consumer access to information -- or how much of the information collected about them should people be able to see, and change?

The panelists also noted that Europe has much stricter privacy protection laws than the United States, and U.S. firms interested in becoming global companies must consider posting policies if they want to do business there. "There's an economic reason to want to do this," Steve Lucas, chief information officer of Privaseek, said.