FTC chief asks Congress to ensure privacy on Web

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Federal Trade Commission Chairman Bob Pitofsky, calling marketers' voluntary responses to Web privacy issues "disappointing," is asking Congress to act on the subject as it relates to children.

He warned that his patience in awaiting self-regulatory industry solutions on issues pertaining to adults also is wearing thin.

In unveiling results of an FTC privacy sweep of Web sites in March, Mr. Pitofsky said the agency wants marketers with Web sites aimed at kids to be required to ask parental permission before collecting information.

The agency may have a further request for congressional action on its adult privacy concerns within months.

Mr. Pitofsky's request last week drew a quick congressional response. Sen. Richard Bryan (D., Nev.) said he would introduce legislation to give the FTC the right to regulate children's Web sites.

No further details were available.

"Right now, we would view self-regulation as not working," said Mr. Pitofsky, citing the study's data showing that as of March, 85% of 1,200 marketer Web sites collected data, but only 14% provided data on their information practices.


The study said 89% of the children's sites surveyed collect information and 54% provide some disclosure about information practices, but only 23% ask children to seek parental permission before they give information and less than 10% give parents control over any information collected from children.

"On kids, we are not willing to wait [any longer] at all," Mr. Pitofsky said. "Our proposal is that Congress ought to act promptly."

The FTC asked for four restrictions. In sites or portions of sites aimed at children 12 and under:

  • Prior parental consent would be required to collect any information enabling someone to contact a child off-line, whatever the company's intended use of the information.

  • Prior parental consent would be required in which personal identifying information is publicly posted or disclosed to third parties.

  • Parents would have to be notified and allowed to remove information, though prior consent would not be required, when Web sites collect e-mail addresses.

    For sites aimed at those older than 12, the FTC is seeking a requirement that parents be notified of any information collected and given the opportunity to remove it.

    The FTC recommendations are similar to the voluntary guidelines already adopted by the Children's Advertising Review Unit of the Council of Better Business Bureaus' National Advertising Division.


    The Center for Media Education has been the main force behind the push for children's curbs. Its president, Kathryn Montgomery, while expressing some disappointment the FTC didn't issue its own children's guidelines, praised the FTC for asking Congress for authority to act on children's issues.

    Technology, advertising and direct-marketing groups, however, were critical.

    Jerry Berman, executive director of the Center for Democracy & Technology, warned that Congress would use the FTC request to open the door to new attempts to limit the information available to children.


    The Association of National Advertisers warned that congressional debate could be even broader, with advertising directed at children potentially becoming an issue.

    The Direct Marketing Association, which has approved a rule barring membership by marketers that don't have a privacy policy in place by July 1999, said it would oppose the FTC's request.

    "We don't need legislation in this area," said Connie Lamotta Heatley, DMA senior VP.

    DMA said its own surveys of Web sites show more marketers have added privacy information.

    Copyright June 1998, Crain Communications Inc.

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