[ISN] Internet Privacy Watchdog Delayed

From: mea culpa (jerichoat_private)
Date: Sun Nov 29 1998 - 01:26:12 PST

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    Internet Privacy Watchdog Delayed
    Robert O'Harrow Jr.
    Washington Post Staff Writer
    Development of an Internet privacy watchdog, to assess whether online
    companies use personal information properly, is behind schedule and may
    not be complete until the end of March. 
    The delay is the latest wrinkle in the Clinton administration's efforts to
    promote industry self-regulation as an alternative to broad privacy
    legislation, which administration officials and others worry might impede
    growth of electronic commerce. 
    White House officials have repeatedly said independent oversight of
    self-regulation is crucial. Last summer the administration dropped threats
    to push for legislation after industry leaders and the Council of Better
    Business Bureaus said it would create a system to assess privacy policies
    and review complaints by the end of the year. 
    But now, as the council prepares to demonstrate its nascent program at a
    White House event Monday, officials acknowledged that it's not operational
    and that questions remain about how it will work and how many businesses
    will use it. 
    "It just took more time than we originally thought," said Russell Bodoff,
    chief operating officer of BBBOnline, which will run the program. "I think
    there's a confidence level that we're on track . . . but there's no
    evidence I can give to you that American business in general is going to
    buy into this." 
    Under the council's plan, an electronic seal would be used at World Wide
    Web sites operated by companies that meet a set of privacy guidelines.
    Companies would have to spell out how they gather information and use it,
    and give consumers a way to make sure the information is correct. They
    also would have to agree to work with the council to resolve consumer
    complaints or risk losing the right to use the seal. 
    Pressure is building on industry leaders and the White House to follow
    through on pledges to prompt companies to issue privacy policies and then
    to stand by them. 
    European officials have warned that U.S. companies  now subject to tough
    new privacy rules that took effect in 15 European Union member countries
    last month  could lose access to personal data in those countries unless
    an effective system is put in place. 
    The Federal Trade Commission also is keeping a close watch. In July,
    Chairman Robert Pitofsky told Congress his agency would support online
    privacy legislation if industry fails to create a self-regulation system
    by the end of the year. 
    David Medine, FTC director for financial practices, said in an interview
    the agency first wants to see how many online companies have posted
    privacy policies. Then it will turn its attention early next year to the
    council's enforcement program. Medine said the FTC is "making the big
    assumption they will be" ready. 
    Privacy advocates also want evidence of progress. Deirdre Mulligan, staff
    counsel of the Center for Democracy and Technology, said she hopes a
    credible self-regulation scheme will fly. But she said the White House has
    to continue to press industry to come up with an enforcement program with
    Mulligan said of people pushing self-regulation, "they have a credibility
    problem." She added, "they have to make a deadline, and they have to stick
    to it." 
    Evan Hendricks, a privacy advocate and publisher of Privacy Times, said he
    believes that the delay is another sign that self-regulation may not be
    workable. "How much more evidence do we need," he said. 
    White House adviser Ira Magaziner played down the delay, saying he
    believes that the council will deliver an effective system. He said the
    group will demonstrate its progress at the White House event Monday. 
    "Do I wish it were up and running? Yes, of course," said Magaziner, senior
    adviser to the president for policy development, who added that the
    program is six to eight weeks behind schedule. "It's not alarming . . .
    They're trying to do something different, something new." 
    A nonprofit group called TRUSTe already provides an oversight service,
    including an electronic seal. But it was a fledgling operation at the
    beginning of the year, and White House officials and others wanted an
    organization with the reach of the Better Business Bureau and the
    experience of resolving consumer complaints. 
    Meanwhile, TRUSTe has experienced huge growth this year and likely will
    play a significant role in providing privacy oversight. The number of
    companies licensed with TRUSTe has increased from 40 at the end of last
    year to about 450 now. That includes Yahoo Inc., America Online Inc. and
    Microsoft Corp. 
    Bodoff of BBBOnline said scores of companies, including some of the
    largest in the nation, also seem enthusiastic about the council's
    initiative. More than 120 companies volunteered to participate in a field
    test of the group's privacy assessment, for example, even though only
    about 40 were needed. The outcome of that test will be released in a few
    weeks. The group also has received industry commitments for $2.3 million
    to launch the initiative. 
    "We're trying to enhance the technology and ease of use for both business
    and consumers, which is why we won't be launching until the first quarter
    next year," Bodoff said. "You want it launched correctly." 
    Among the questions that remain unanswered is how to draw in large
    companies that decline to join any seal program. Officials at McGraw-Hill
    Cos. have indicated they won't participate, in part because they already
    have a strong record for protecting customer privacy. 
    "We don't see it as a one-size-fits-all solution," McGraw-Hill spokesman
    Neal Allen said. "We want our customers to come to us to resolve their
    problems. . . . We have a system that works well for us." 
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