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Senate eyes Net privacy
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May 23, 2000: 4:02 p.m. ET
Senator proposes Web privacy bill after FTC asks Congress for authority
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NEW YORK (CNNfn) - Democratic Sen. Fritz Hollings of South Carolina and nine colleagues proposed new online legislation Tuesday on the heels of the Federal Trade Commission's appeal to Congress to grant it with more authority to crack down on Internet sites that violate the privacy of consumers.
"We believe that it is necessary to establish common-sense, minimum federal standards that can provide a protective framework for online transactions," Hollings said. "We believe that this legislation strikes a balance between asserting the appropriate federal role while recognizing the efforts of the industry."
Hollings' proposal calls for operators of Internet sites to provide consumers with tenets of the "Fair Information Practices Standards," including notice, consent, access and security.
"For many consumers, privacy concerns represent the only remaining obstacle impeding their full embrace of the Internet's ample commercial opportunities," Hollings said. "Ensuring privacy is good business, and establishing a federal standard for these protections will allow us to address consumers' concerns before they pass up the growing Internet marketplace altogether."
 On Monday, the U.S. Federal Trade Commission asked Congress to grant it new powers to protect consumers' online privacy and said self-regulation by the Web industry fell "far short." The authority sought by the FTC would permit it to regulate the types of notices users receive when Web sites collect information about them online.
The Commission said it was acting on a previously unannounced 3-2 vote held Friday, which called for a basic level of privacy protection for commercial Web sites. The vote was based on an FTC-commissioned report that found only 20 percent of a random sample of Web sites adhered to voluntary privacy standards developed by the FTC.
"Self-regulation alone has not adequately protected consumer online privacy, and as a result, legislation is now needed to supplement self-regulatory efforts and guarantee basic consumer protections," the FTC said.
The FTC's request to Congress is a major shift in its previous hands-off policy, allowing the industry to self-regulate. The request for new legislation faces an uncertain future in Congress - strongly opposed by the e-commerce industry, disdained by Republicans and lacking backing from the White House.
FTC Commissioner Orson Swindle dissented from the vote and labeled the results of the FTC's recommendation to involve Congress "most disturbing."
"The Privacy Report is devoid of any consideration of the costs of legislation in comparison to the asserted benefits of enhancing consumer confidence and allowing electronic commerce to reach its full potential," Swindle said.
"Instead, it relies on skewed descriptions of the results of the Commission's 2000 Survey and studies showing consumer concern about privacy as the basis for a remarkably broad legislative recommendation. It does not consider whether legislation will address consumer confidence problems and why legislation is preferable to alternative approaches that rely on market forces, industry efforts, and enforcement of existing laws," Swindle said. 
-- from staff and wire reports
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