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An Invitation to Get Proactive on Online Privacy Policy

White House guidelines give the online community a chance to set privacy rules before the government does


Announced by the White House last week, the Obama Administration’s Internet privacy guidelines presented social networks, companies that dominate online search, and app developers with a chance to weigh in and set rules for the data-collection strategies that are crucial to their growth.

The White House guidelines, called the Privacy Bill of Rights, are intended to lay the groundwork for a U.S. code of conduct to protect personal information. Consumer advocacy groups are hoping the online industry will accept the offer to chart their own path before the government does it for them.

The release of the guidelines was driven in part by news reports about online privacy issues and data collection techniques. A few key issues keep cropping up, including how consumers’ personal information is gathered and used, and whether online services make consumers aware, in plain and simple terms, of the services’ data collection and privacy policies.

Alerting, rather than ambushing, the online community

The guidelines are intended to provide a framework for policies that would give consumers the right to secure and responsible handling of their personal information, limit how that information may be used, and assure that privacy policies are presented in understandable language. The initiative calls for the Commerce Department to meet with stakeholder companies and consumer groups to develop the standards. After that, the Federal Trade Commission would have the authority enforce the standards and impose sanctions when companies break the rules.

Online media companies have been reluctant to adopt policies that might hurt their competitiveness, particularly when it comes to mining data about consumer product preferences and online habits that might help them target advertising. With the privacy blueprint, the administration is giving companies an opportunity to create a level playing field and hash out a plan they all can live with.

Rules with teeth?

The initiative also puts the U.S. on par with the privacy rules the European Union is trying to develop. Those rules would give data protection agencies in the EU’s 27 countries the authority to sanction companies that violate requirements for handling personal information.

Because it’s an election year, it’s unlikely Congress will make headway on new laws to address online privacy. Nonetheless, it’s an issue that no longer can be ignored as reports emerge about data collection practices and the privacy policy ambitions and data collection tactics of companies such as Google (NASDAQ:GOOG), Facebook, Twitter, and social networking application developer Path.

Path, which offers a mobile application designed to make it easy for users to locate friends who also are using the service, sparked an outcry after it was revealed that the company downloaded and stored entire personal address books of Apple (NASDAQ:AAPL) iPhone and iPad users without their consent. Apple also took some heat from consumers and Congress for not requiring an explicit opt-in advisory for all Path users (there’s also a version of the app for phones equipped with Google’s Android operating system).

Big players vow cooperation

Google, Facebook, and Yahoo (NASDAQ:YHOO) are among some of the companies that have agreed to allow a “do-not- track” button to be embedded in their Web browser, which lets users restrict the amount of data that is collected about them. Nonetheless, Google still could face fines if the Federal Trade Commission agrees with the Electronic Privacy Information Center, also known as EPIC, and the Center for Digital Democracy that the search giant violated an agreement it struck last year with the FTC, which declared Google would not use consumers’ personal information without their permission.

Facebook also has been accused of using tracking software to monitor users even when they are not on the company’s website. Microsoft (NASDAQ:MSFT), meanwhile, is taking digs at Google’s and Facebook’s privacy policy woes to promote its own products.

It’s business as usual, in other words, in an environment where change and opportunities seem to travel at the speed of light. Clear and enforceable privacy guidelines may one of the few things that would offer the Internet community some welcome stability.

Article printed from InvestorPlace Media,

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