FTC Member Applauds Industry Efforts at Self-Regulation of Internet Privacy
Fickenscher, Lisa, American Banker
A member of the Federal Trade Commission lavished praise Tuesday on corporate America for the self-regulatory steps it has taken to protect consumer privacy on the Internet.
"Industry is to be congratulated on self-regulation," said Orson Swindle at a conference held by the newsletter Privacy & American Business. "I applaud the way many businesses have approached privacy."
Though Mr. Swindle is a member of the commission's Republican minority and was expressing his own views, they reflect a softening in what had been a severely critical view of banks' and other businesses' on-line privacy measures. The FTC and bank regulators had been threatening to take action if private industry did not. The federal bank and thrift agencies said Tuesday that most of the biggest financial institutions on the Web do not meet FTC standards. (See article on page 3.)
In a report to Congress in July that was approved by three of the four FTC commissioners -- including Mr. Swindle and Chairman Robert Pitofsky -- the FTC pointed to "much progress" and said "on-line businesses are providing significantly more notice of their information practices than they were last year."
The report, "Self-Regulation and On-line Privacy," said that "major challenges to self-regulation" persisted, but that legislative redress did not seem necessary.
Mr. Swindle said the threat of legislative action has not disappeared. But efforts by consortia -- such as the NetCoalition.com, site that major on-line companies use to encourage good privacy practices -- are mitigating that threat.
"I believe the consumer and a responsive business community will carry the day," Mr. Swindle said. "Free enterprise is not perfect, but it is something that can work. It will require people insisting on their privacy being protected."
One factor in business' favor, Mr. Swindle said, is that the FTC is physically incapable of regulating all commercial Web sites, which number four million and are increasing by 300,000 a month.
"Self-regulation will do a far better job than government regulation," Mr. Swindle said. "I'm confident that the industry is moving forward on these issues."
Consumer privacy advocate Evan Hendricks, publisher of the Washington-based newsletter Privacy Times, was critical of Mr. …