Cyberspace Creating New Privacy Standards

Article excerpt

For proof that privacy is issue No. 1 with Internet users, look no further than last month's goof by America Online.

The country's largest online service had quietly altered its user terms of service - the rules subscribers agree to abide by when they sign up - so that it could rent out members' telephone numbers to telemarketing partners such as membership buying club CUC International Inc. and TeleSave Holdings Inc., a discount phone service.

The new telemarketing scheme, which wasn't publicly announced, was to take effect July 31. But when reporters and AOL subscribers found out, it instantly made headlines. After widespread protests by customers and electronic-rights advocates - and a one-day, 2.6 percent dip in the company's stock price - AOL Chairman Steve Case capitulated and canceled the policy. But AOL may still make telemarketing calls for its partners, the company said.

The incident points out how seriously Internet users take their online privacy.

Selling lists of consumer names, addresses and phone numbers is the norm in the direct-marketing industry. But the Internet is held to a different standard, according to Christine Varney, outgoing Federal Trade Commission commissioner.

On the Internet, where companies such as America Online can track a person's online behavior and match it with other demographic data, using that information "is so much more an invasion of privacy," said Varney, speaking at an electronic privacy gathering in San Francisco held the same day that AOL canceled its telemarketing plan.

That's not to say the government should step in and regulate what information companies can gather online, said Varney, who will leave her post in September to practice Internet law.

"Government solutions are burdensome and oftentimes an invasion," she said. "We need the government to act as a floor. When it comes to children, we should have laws regarding collection of information without a parent's consent."

But regulating junk "spam" mail and other commercial uses of the Internet could chill innovation and challenge freedom of speech, Varney said.

Instead, Varney and other free-market advocates support the use of technology to solve the privacy problem.

One solution: using software to block "cookies," Web-site technology that tracks a visitor's password, shopping purchases and other data and stores it on the person's computer hard drive for future reference. Cookie filtering programs include Pretty Good Privacy's Cookie Cutter ( http://www.pgp.com), Barefoot Productions' CookieMaster 2.0, available from ZDNet's Hotfiles shareware library (http://www.hotfiles.com), and The Limited Software's Cookie Crusher, also available from Hotfiles. …