Privacy: FTC Urges Self-Regulation, Study Finds Fear

Article excerpt

Is corporate America capable of protecting consumers' interests in matters of personal privacy, or is government oversight and regulation mandatory?

This question was hotly debated at a two-day conference this week in Washington sponsored by Privacy and American Business, a newsletter published by the nonprofit Center for Social and Legal Research, based in Hackensack, N.J.

Business executives, primarily in the financial services industry, listened warily as a parade of legislators and government officials sought to convince them that government intervention was not inevitable.

The conference provided a forum for discussions on how consumers' privacy should be managed as new technologies replace traditional direct marketing methods, allowing companies to capture and use more personal information.

Christine A. Varney, a commissioner of the Federal Trade Commission, tried to allay fears that the government intends to regulate on-line commerce and other electronic activities.

"I have no interest in running your businesses or making your life miserable," she said. "Business and government should be partners. I am a strong believer in self-regulation."

The commissioner was warmly received with hearty applause by an audience filled with attorneys, representatives from the three credit bureaus, banks, credit card lenders, and direct marketers.

Though Ms. Varney spoke of "open dialogue" and "partnership" between the FTC and the business community, she also emphasized that companies with access to personal data have an obligation to disclose to consumers how the data about them are used, stored, and protected.

"Accurate and timely disclosure is the answer," she said.

However, her comments left some people wondering how the FTC defines "timely disclosure," and how far users of personal information must go in explaining how they use it.

The FTC may answer some of those questions next spring. That is when it plans to release an expanded version of the broad privacy principles, which the Privacy Working Group of the White House's Information Infrastructure Task Force issued in June.

In the meantime, the FTC has invited the public to submit comments on privacy matters.

After Ms. Varney's presentation, it was not clear if the business community was convinced that the FTC is going to implement regulations. But one thing is clear, said Martin E. Abrams, director of privacy and consumer policy for TRW Information Systems and Services. "The FTC intends to be the arbiter on privacy matters."

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Summarizing the results of a consumer privacy survey presented at the conference, Alan F. Westin, editor and publisher of Privacy and American Business, said that though an increasing majority of people are concerned about threats to their personal privacy, "Americans are not hostile to businesses using their information. …