FTC applies more pressure to sites marketing to kids

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The pressure is building in Washington to limit the kind of personal information marketers can ask of kids online.

In addition to cracking down on actual marketer Web sites, the Federal Trade Commission has begun pushing the Children's Advertising Review Unit of the Council of Better Business Bureaus into toughening its new guidelines for online privacy.

At hearings June 12-13, FTC Commissioner Christine Varney suggested that marketers be blocked from obtaining such personal information from those under age 12 as age, sex, home address and e-mail address without parental consent.

TOUGHER GUIDELINES

That recommendation or something similar is expected to be included in the final draft of the Clinton administration's recommendation on Web commerce, due to be unveiled July 1. The guidelines also stress the need for acquiring parental consent and require sites to disclose their marketing motives in language that kids can understand.

The Center for Media Education, a consumer group whose study of online practices triggered the FTC's look at children's issues, told the FTC that many major marketers are ignoring CARU's guidelines. Even when marketers do comply, CME claimed, the guidelines don't go far enough.

In addition to asking the FTC to draft its own rules, CME, together with the Consumer Federation of America, is proposing stricter standards that would cover people through age 16. Rules would also target marketers' sites and companies gathering market research on the Web.

REQUIRING PARENTAL CONSENT

Among its proposals: Require sites to obtain original written signatures from parents before a child can provide information; require the same disclosure and approval for information that is tracked anonymously; and require a disclosure notice on each page that seeks information.

CME--in what seems an unrealistic expectation--envisions parents downloading consent forms from marketers' sites, signing the forms and mailing them back to each Web site.

`WE WILL SEEK LEGISLATION'

"We have been waiting for the industry to clean up its practices," said Mary Ellen Fise, general counsel of the Consumer Federation. "More children are going online. We can't wait another year. If the commission doesn't act, we will seek legislation."

CARU,however, argued that although its guidelines are relatively new, marketers are complying immediately with the proposed standards.

"We are not rethinking our guidelines. Rather, we have emphasized that this is an evolving standard," CARU Director Elizabeth Lascoutx said last week.

While privacy was the focus of the hearing, one FTC commissioner offered some cautions to participants.

QUESTIONING FTC'S REACH

Reacting to a plea from a privacy group to stop marketers from asking for information best kept private, FTC Commissioner Roscoe B. Starek III said that the FTC by law is limited to regulating "unfair" or "deceptive" statements, and that the question of what should be private is not one the agency can handle.

Mr. Starek also noted that the current advertising-supported Web sites may be an alternative to charging fees at some sites. He questioned whether attempts to restrict advertising on Web sites would increase the frequency of subscription fees and deter people from accessing information online.

Copyright June 1997, Crain Communications Inc.

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