Federal Online Privacy Law: When will it happen?

You’re likely aware of the ongoing discussion in Washington, DC that regulatory agencies like the Federal Trade Commission (FTC) and the Department of Commerce are having with companies that engage in e-commerce. Much of the discussion centers on online privacy with regard to things such as:

  • Which party is responsible for maintaining online privacy? The business? The consumer? Or both?
  • Should businesses give consumers the option to opt-in or opt-out of cookies?
  • What role should the consumer play when it comes to maintaining their individual privacy online?

Being that businesses already bear much of the responsibility for maintaining online privacy for consumers, it wouldn’t be surprising for any future online privacy law to mandate business and technology entrepreneurs to bear the brunt of adhering to laws and regulations put forth by Congress and regulatory agencies.

Following the European Model

Online regulators in the European Union have adopted online privacy laws that treat online privacy as a basic human right in order to give Internet users the peace of mind that the information users give online will be kept safe. That’s why Internet companies with a global mindset are beginning to put stricter privacy measures in place in order to accommodate European consumers. Thus the trend continues of Europe leading the way pioneering laws and regulations pertaining to the Internet and online privacy.

When will the United States catch up?

So far, no US president whose time in office that has intersected with the expansion of the Internet (Clinton, G.W. Bush, and Obama) has proposed legislation designed both to protect consumer privacy and spur innovation.
There have been plenty of bills put before Congress which address issues pertaining to online privacy. But experts in both the technology and business industries have indicated that many of the bills originating in Congress are flawed in one or both of the two ways listed below:

  1. The bill is too compartmentalized, in that it only deals with specific aspects of online privacy. Bills on whether or not to ban cookies, regulating the ability of online advertisers to track consumer behavior, or whether a consumer’s personally identifiable information should be deleted once it is no longer needed by the web operator.
  2. The proposed legislation hampers innovation so that online businesses can’t effectively market to consumers based on the consumers likes and interests.

Whether there will be a bill that addresses online privacy in a sensible, reasonable, and balanced way that will be introduced in 2012 remains to be seen. Lawmakers and regulators are still trying to sort out the good, the bad, and the ugly of what already happens on the Internet with regard to striking the balance between protecting consumers and igniting innovation that’s used to benefit commerce on both sides of any transaction.
It would be nice for online businesses to implement data protection mechanisms to ensure online privacy for the consumer. Yet how do online businesses do it in order to comply with federal laws and regulations, and still present data protection mechanisms to the consumer in a user-friendly manner?
In the realm of online privacy, the marriage of style and substance is in need of marriage counseling. However, the counselors (read: Congress) haven’t been able to decide the best course of action to save the troubled marriage.

Don’t Wait. Self Regulate.

Some companies have taken the initiative to present consumers with a user-friendly approach to online privacy. By asking simple yes or no questions about what information the online business can or cannot use with regard to tracking the users likes, preferences, and web surfing habits, consumers have found their online shopping and social networking to be streamlined and more enjoyable.
What is your online business doing to protect the privacy of your customers? Does your website have a clear opt-out or opt-in tool that allows your customers to guard their privacy? Do kids visit your website? Does your website comply with the Children’s Online Privacy Protection Act(COPPA)?
Not sure?
Have an experienced Internet lawyer, who is up to date on online privacy issues, do a privacy audit of your website and privacy policy. An Internet attorney experienced in the area of online privacy can give you suggestions to make sure your website is in compliance with all federal, state, and local regulations.

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