Self-Regulation and Privacy Online: A Report to Congress

In July 1999, the Federal Trade Commission issued a new privacy report to Congress titled Self-Regulation and Online Privacy: A Report to Congress (the "Report") that assessed the progress made since its 1998 Report ("Privacy Online: A Report to Congress"), and set forth an agenda for Commission actions to encourage implementation of online privacy protections. The Commission found notable progress in self-regulatory initiatives, and that online businesses were providing significantly more notice of their information practices. However, it also found that the vast majority of the sites surveyed collected personal information from consumers online, and that the implementation of fair information practices was not widespread.

The FTC found the emergence of online privacy seal programs (TRUSTe, BBBOnLine], and other online privacy seal programs) to be a promising development in self-regulation. These programs require their licensees to abide by codes of online information practices and to submit to compliance monitoring in order to display a privacy seal on their website. However, the Commission found that only a handful of all websites currently participate in online privacy seal programs, and that as a result it was too early to judge how effective these programs will be. In light of its preferred approach to privacy protection through self-regulation, the Commission concluded that legislation to address online privacy was not appropriate at the time.

Instead, the Commission developed an agenda to address online privacy issues, and identified areas where industry could improve on: continue to encourage widespread adoption of fair information practices; ensure that companies adhere to the core privacy principles; and educate consumers about privacy protection on the Internet.