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Media companies and direct marketers claim that change now sweeping the Web eliminates any need for governmental action.

But Federal Trade Commission members, after four days of hearings last week, seemed decidedly less certain.

Commissioners suggested that unless new technology unveiled at the hearings can adequately deal with privacy issues, the need to get so-called "bad actors" to follow industry leaders may require regulation. And some of the regulations mentioned are sweeping.


Among those discussed: new limits on commercial use of the "public" records that form the base of many marketing databases; bars on marketers gathering any tracking data on individuals' use of Web sites before a consumer approves; and requirements to prevent publishers that gather data for one magazine from using it for another.

However, there also was some caution, and a discussion of the FTC instead implementing variations on new industry self-regulation codes put forth by groups ranging from the Direct Marketing Association to the Interactive Services Association.

The FTC will write a report on the hearings; that report is expected to recommend new policies and perhaps legislation.

In his testimony, McGraw-Hill Cos. Chairman-CEO Joseph L. Di-onne described his company's extensive review of privacy concerns that led to a new policy which limits the kind of personal information tracked; separates personal information that can be sold with a consumer's permission from "sensitive" information that will never be sold; and even lets a consumer choose to prevent one McGraw-Hill unit from seeing "sensitive" information obtained by another.

In addition, various industries presented their own new guidelines, and warned that privacy is a balancing act and consumers choose to trade some of it for getting information targeted to their needs.

"We need to separate the fact from the fiction," said DMA President-CEO H. Robert Wientzen.


Some of the progress, however, occurred just hours before the testimony got under way.

The New York Times adopted a privacy policy for its Web site little more than two days after running an embarrassing story in its cyberedition. That story was about a report that 17 of the top 100 Web sites had privacy policies and naming the newspaper's site as one that did not.

Arthur Sackler, Time Warner VP-law and public policy, said his company has at least temporarily halted asking consumers for survey information and is currently auditing the privacy standards of the 190 sites maintained by its various divisions.


FTC Commissioner Christine Varney questioned whether there was a difference between public information being available at a courthouse and it being so readily available at a computer terminal that anyone could get it at a moment's notice.

FTC Chairman Robert Pitofsky and Ms. Varney also questioned whether consumers should have the right to know when their information was being accessed and the ability to correct misinformation.

Turning to Web privacy itself, the commission unveiled a study by Louis Harris & Associates saying that consumers-while deeply concerned about Web privacy-had few actual problems. Of the 5% of people reporting problems, most cited unsolicited e-mail.

While privacy proponents called for either allowing consumers to access Web sites anonymously or at least requiring disclosure of what information was being gathered and what would be done with it, others warned the FTC to proceed slowly.

Jerry Berman, executive director of the Center for Democracy & Technology, said dramatic FTC action could bring lawyers running and stop progress.

"This could be Communications Decency Act II," he warned, referring to the fight over Congress' passage of restrictions on indecent Web content.

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