The commerce department privacy report and a “privacy bill of rights”

The issue of Internet privacy has been debated throughout Washington, DC, from the hallowed halls of Congress to the Oval Office. Of particular interest is the issue of behavioral monitoring in Internet advertising and of how much control consumers should have over their personal data on the Web.

In December 2010, the Federal Trade Commission (FTC) released a report recommending that Internet advertisers develop a “do not track” mechanism that would allow consumers to see how their data is being used by marketers and that would give consumers the ability to opt out of Internet tracking. That same month, the Department of Commerce followed in the FTC’s footsteps by releasing its own preliminary report on the issue of Internet advertising. The Commerce Department’s report focuses much more on the economy of the Internet and frames its privacy solutions as an economic benefit for Web companies.

Five key recommendations from the Commerce Department report

The Commerce Department report, officially entitled “Commercial Data Privacy and Innovation in the Internet Economy: A Dynamic Policy Framework,” offers five key recommendations.

·         Develop a privacy bill of rights for online consumers.

The Commerce Department report recommends the development of a bill of rights for consumers that would help them understand how Internet advertisers and other commercial entities collect and use their personal online data. The baseline protections would build on the FTC’s preexisting Fair Information Practice Principles.

·         Create a privacy policy office in the Department of Commerce.

One of the more interesting recommendations in the report suggests the creation of a Privacy Policy Office within the Department of Commerce that would work with the FTC, the White House and other organizations to coordinate efforts related to the development of “enforceable privacy codes of conduct.”

·         Reduce regulatory barriers, and encourage global trade.

As mentioned above, the Commerce Department report analyzed the economic impact of Internet legislation more thoroughly than previous analyses. In the report, the Commerce Department acknowledges a growing gap between European privacy laws and American privacy laws. The Commerce Department recommends that the US government should work with foreign leaders to find a balance that would allow businesses to reduce compliance costs and easily conduct business across international borders.

·         Develop a standard system for notifying consumers of security breaches.

As part of its privacy framework, the Commerce Department recommends the development of a standard system by which companies would notify consumers of personal data breaches. This goal would be achieved through a new federal law. If all companies were required to announce data breaches in the same way, the Commerce Department believes it would improve compliance, streamline business practices and provide enhanced consumer protection.

·         Review the electronic communications privacy act with future technology in mind.

The forward-looking Commerce Department report also acknowledges the growing use of cloud computing technology and geo-location services. Specifically, the report recommends reviewing the  Electronic Communications Privacy Act (ECPA), passed in 1986, with an eye to revisions that mirror 21st-century Internet practices and that are more flexible with regard to emerging technologies.

Response to the Commerce Department’s recommendations

Initial response to the Commerce Department report has been positive. In an interview with Wired Magazine, Justin Brookman of the Center for Democracy and Technology praised the Commerce Department report, saying it “lays out a creative and flexible approach to develop enforceable privacy protections for consumers,” but also acknowledging that Congress must now “enact a baseline consumer-privacy law that’s built on the strong recommendations contained in the Commerce and FTC privacy reports.”

Although both the Commerce Department report and the FTC report make strong recommendations, they will ultimately mean nothing if the issue isn’t taken up in Congress. Reports suggest there’s strong bipartisan support for some kind of privacy protection for consumers, but nothing is guaranteed yet. Presumably, Internet advertising trade groups will issue a response to both the FTC and Commerce Department reports, seeking greater leniency that might delay truly comprehensive privacy legislation.

The Commerce Department is seeking public comment on its report and, according to the Department’s official press release, “will publish questions from the report in a Federal Register notice.” The Commerce Department always intended this report to be a preliminary analysis with more thorough recommendations to follow. It will be interesting to see how the next iteration of the report changes based on feedback from both consumer privacy rights activists and Internet lobbyists.