WASHINGTON -- In what both sides hailed as a big step in online privacy protection, the government reached agreement yesterday with a group of Internet advertisers on how they will glean information from Web surfers and what they will do with it.
The Federal Trade Commission said it had agreed with the advertisers on crucial principles. From now on, Web surfers will be told explicitly of advertisers' attempts to profile potential consumers and will be given the option of choosing not to participate. Nor can anonymous information previously collected be linked to "personally identifiable data" without a consumer's consent.
But the commission said it would continue to press for legislation protecting privacy during online profiling -- something that the advertisers are decidedly lukewarm about.
"Industry self-regulation must play a central part in protecting consumer online privacy," said Jodie Bernstein, director of the commission's Bureau of Consumer Protection. She applauded the advertisers, who negotiated with the agency as the Network Advertising Initiative, for their cooperation.
Self-regulation is what the advertising group has advocated all along. "We think it should be given a chance to work," said Jeff Connaughton, a lawyer for Quinn Gillespie & Associates, a Washington lobbying firm that represented the group in talks with the F.T.C.
Legislation to require Web sites to disclose what they do with data collected from those who view the sites was introduced on Wednesday by Senator John McCain, the Arizona Republican who heads the Senate Commerce Committee. Senators Spencer Abraham, Republican of Michigan, and John Kerry and Barbara Boxer, Democrats from Massachusetts and California, respectively, are co-sponsors.
Despite the bipartisan sponsorship, it is by no means clear that Congress will act on the issue before the elections. But no one, in politics or out, disputes that Internet privacy will continue to be an issue of surpassing interest and importance as computer technology advances.
The advertisers agreed to put their self-regulatory principles into effect at once, the commission said. Those principles include enforcement by independent outsiders.
The Network Advertising Initiative consists of most of the biggest names in Web advertising, including AdKnowledge, DoubleClick and Engage Technologies. The consortium embraces about 90 percent of the Internet-advertising industry, and Ms. Bernstein asserted that federal law is needed to make the rest comply with the majority's precepts.
Perhaps not, Mr. Connaughton suggested. He said the 10 percent might be led by "centrifugal force" to go along, or risk losing both respect and business.
The F.T.C. has been negotiating with the advertisers for months, and while both sides described the talks as generally collegial, the agency's final vote reflected divisions. While the five commissioners said they "unanimously applauded" the consortium's efforts, one commissioner, Orson Swindle, dissented from the overall document on grounds that legislation would be "overly burdensome and unwarranted." And another commissioner, Thomas B. Leary, issued a separate statement calling for less sweeping legislation than his colleagues favor.
Wayne Matus, a New York lawyer who specializes in Internet-privacy issues, predicted in a telephone interview that legislation would be enacted eventually. While the Internet is a blessing for businesses and information-seekers, it is also "potentially very dangerous to individuals and their privacy," he said.
Information about people and their buying habits was available long before the computer era, of course. Someone who subscribed to a golf magazine, say, could expect to get unsolicited mail about golf resorts or golf schools.
Nowadays, infinitely more information -- or misinformation -- can be inferred about a person's hobbies, finances, health and even sexual preference based on his or her Web use. While no one interviewed yesterday could cite an individual "horror story," no one disagreed that technologically speaking the worst imaginable violations of privacy are feasible.
But Mr. Connaughton said the advertisers who reached the accord with the government had pledged to "draw a circle around sensitive personal data" like medical and financial information.
David Stout, The New York Times. July 28, 2000
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