(By Jonathan Krim, Washington Post Staff
Writer) Friday, October 5, 2001; Page E01
The Federal Trade Commission yesterday
outlined a new agenda for protecting consumer privacy that will focus on
tougher enforcement of existing laws rather than new legislation sought by the
agency under the Clinton administration.
FTC Chairman Timothy J. Muris
announced at a forum in Cleveland that the agency will increase the size of its
enforcement staff by nearly 50 percent to combat the growing problems of
identity theft, unscrupulous telemarketing, online fraud and unwanted e-mail
solicitations.
He said new legislation spelling out
privacy protections was not needed now in part because private industry had
made great strides in protecting consumers and their information, and users
will gravitate toward companies that provide the best protections.
Two of the five FTC commissioners took
issue with that assessment, along with some key members on both sides of the
aisle in Congress, who vowed to continue pushing for new privacy laws.
"I'm disappointed that the new FTC
chairman has taken a 180-degree turn against Internet privacy legislation,"
said Senate Commerce Committee Chairman Ernest F. Hollings (D-S.C.). "This
flies in the face of five years of FTC studies and analyses that clearly
demonstrated that such legislation is necessary."
Among the enforcement initiatives
Muris is proposing is a crackdown on the practice of "pretexting," in which
"information brokers" call financial institutions and obtain personal account
information by posing as customers.
Muris also vowed to curb unsolicited
e-mail advertising by creating and operating a national list of people who do
not want receive the material. Under the proposal, companies that ignored the
list could be prosecuted for violating FTC rules.
And the agency will more aggressively
monitor and take action against companies that violate their privacy policies,
whether they do business online or not.
Overall, the plan would increase the
enforcement staff for privacy-related actions from 35 to 52, according to an
agency spokeswoman. Muris said the agency has received additional funding from
Congress and that money will not be diverted from other FTC functions.
Muris also said his plan does not
preclude the agency from seeking new legislation in the future, but that more
time is needed to evaluate whether existing laws are sufficient.
Republican commissioner Orson Swindle,
who has long argued for market-based solutions, hailed the plan. So did the
marketing industry, which called it a sensible approach that recognized
private-sector solutions are working to protect privacy.
But that assertion was disputed by an
independent financial consulting group, which earlier this month released a
report saying that consumer fears about divulging personal information over the
Internet are growing and could result in $15 billion in lost online commerce
this year.
"He just poured gasoline on the
privacy fire with that announcement today," said John C. McCarthy, director of
research for Forrester Research Inc. of Cambridge, Mass. "They acknowledge
there's a problem, but they haven't told business what's acceptable
behavior."
FTC Commissioner Mozelle W. Thompson,
a Democrat, said the Muris plan does nothing to address the fundamental
loophole in existing law, which is that not all Web sites are required to post
policies stating how they will use information gathered from customers.
Thus, a company without a policy
cannot be subject to enforcement for violating it, he said.
Shiela F. Anthony, the other Democrat
on the commission, applauded Muris's plans for greater enforcement, but said
that without legislation establishing firm privacy requirements, "it is
unlikely that consumers' privacy can be adequately protected from identity
theft, commercial harassment and hucksterism."
For many years, the FTC under former
chairman Robert Pitofsky believed that industry could adequately regulate
itself. But that view changed in the past two years.
David Medine, who headed the office
that worked on privacy issues for Pitofsky, said that in a survey completed
last year, fewer than half of Web sites gave adequate notice of their privacy
policies or sufficient choice in how consumer information could be used.
Thomas B. Leary, another Republican
member of the commission, had supported the need for legislation requiring
companies to have privacy policies. But he said Muris's approach was more
practical now because Congress will be largely focused on issues surrounding
the Sept. 11 terrorist attacks.
On Capitol Hill, several members of
Congress acknowledged that passing legislation in the current climate might be
difficult, but said they would not give up. Rep. Joe Barton, a Texas Republican
and one of four key members of the bipartisan Congressional Privacy Caucus,
said that existing laws governing financial and health records need to be
tightened and that Web sites should be required to post privacy policies.
Another member of the caucus, Rep.
Edward J. Markey (D-Mass.), said the Muris decision is a "back-to-the-future"
privacy policy.
"We've already been down this road and
we know that relying solely on voluntary online protections will leave
consumers' personal information vulnerable to abuse," Markey said.
But others, such as Sen. George Allen
(R-Va.), said they support the FTC's plan. Allen said that existing laws
governing financial records have resulted in "consternation, confusion and
costs" associated with compliance, and that now is not the time to enact more
laws and regulations. |