The Obama administration on February 23 unveiled the blueprint for a Consumer Privacy Bill of Rights to improve consumer privacy protections online and give consumers more control over how companies and data aggregators use their personal information.
The Commerce Department's National Telecommunications and Information Administration will convene companies, privacy and consumer advocates, technical experts, international partners, and academics to establish specific practices or codes of conduct around seven principles:
- Individual Control: Consumers have a right to exercise control over what personal data organizations collect from them and how they use it.
- Transparency: Consumers have a right to easily understandable information about privacy and security practices.
- Respect for Context: Consumers have a right to expect that organizations will collect, use, and disclose personal data in ways that are consistent with the context in which they provide the data.
- Security: Consumers have a right to secure and responsible handling of personal data.
- Access and Accuracy: Consumers have a right to access and correct personal data in usable formats, in a manner that is appropriate to the sensitivity of the data and the risk of adverse consequences if the data is inaccurate.
- Focused Collection: Consumers have a right to reasonable limits on the data that companies collect and retain.
- Accountability: Consumers have a right to have data handled by companies with measures in place to assure they adhere to the Consumer Privacy Bill of Rights.
"American consumers can't wait any longer for clear rules of the road that ensure their personal information is safe online," said President Barack Obama, in a statement. "As the Internet evolves, consumer trust is essential for the continued growth of the digital economy. That's why an online privacy bill of rights is so important…. By following this blueprint, companies, consumer advocates, and policymakers can help protect consumers and ensure the Internet remains a platform for innovation and economic growth."
So far, leading Internet companies and online advertising networks are committing to act on "Do Not Track" technology offered through major Web browsers. Companies that deliver nearly 90 percent of online behavioral advertisements, including Google, Yahoo!, Microsoft, and AOL, have agreed to comply when consumers indicate that they do not want data collected. The advertising industry also committed to not release consumers' browsing data to companies that might use it for purposes other than advertising.
"It's great to see [companies]stepping up to our challenge to protect privacy…. More needs to be done, but the work they have done so far is very encouraging," said Federal Trade Commission Chairman Jon Leibowitz.
"Every day, millions of Americans shop, sell, bank, learn, talk, and work online. At the turn of the century, online retail sales were around $20 billion in the United States; now they're nearing $200 billion," said Secretary of Commerce John Bryson. "The Internet has become an engine of innovation, business growth, and job creation, so we need a strong foundation of clear protections for consumers, and a set of basic principles to help businesses guide their privacy and policy decisions."
Initially, the guidelines would be voluntary, but those that agree to abide by them could face sanctions for violations.
The effort comes as companies have found more sophisticated ways to collect and aggregate data about consumer interests and habits. The growing use of smartphones and tablet computers adds another dimension to tracking. Location-based services like Foursquare can reveal where and when consumers spend their time and money, and in some cases, even with whom.
The data collected is supposed to help companies improve and personalize services and provide targeted marketing campaigns and advertising messages, often without consumers even realizing it.
And that's where the greatest pain point comes for many consumers, who overwhelmingly feel subjected to too much digital advertising and promotions. In fact, 66 percent of American and British consumers surveyed in "The 2012 Digital Advertising Attitudes Report," published in late February by Upstream and YouGov, say they do not want to be targeted with such material more than once a month.
Public privacy and consumer advocates are already meeting the proposed bill of rights with guarded skepticism. John Simpson, privacy project director at Consumer Watchdog, warned that the test of its effectiveness will come as the implementation unfolds.
"The real question is how much influence companies like Google, Microsoft, Yahoo!, and Facebook will have in their inevitable attempt to water down the rules that are implemented and render them essentially meaningless," Simpson said in a statement.
Simpson also warned that the Commerce Department's role is to protect the interests of businesses, not consumers, which he says could affect how doggedly it goes after violators.