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The New FTC Online Privacy Guidelines: Will “Do Not Track” Become Reality?

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The Federal Trade Commission has been busy.  Hot on the heels of a new set of Green Guides regulating environmental claims, yesterday the FTC unveiled a new proposed framework for consumer privacy.  Entitled (appropriately enough): “Protecting Consumer Privacy In An Era of Rapid Change,” this document is the result of many months of roundtable meetings with industry and consumer groups.  While this is just a proposal (public comments are being sought until January 31, 2011) there is little question that new guidelines of some kind will be put in place next year, and will probably follow some (although not all) of this document.  So what does it mean?

The proposals from range from the banal (everyone should have clearer, more concise privacy policies) to the potentially dramatic (the idea of a “do not track” button on websites to protect against data mining).  Of course, that last item is the one that drew the headlines.  But how much of this will actually become a reality?

Be assured that the banal items will all become elements of the future guidelines.  Companies will almost certainly need to become more transparent and clear in their privacy practices, and the FTC’s long-standing concerns in this regard are likely to remain a continuing element of its enforcement approach.  The dramatic elements of the report are, however, far less likely.  To begin with, it is not clear that the FTC even has the power to enact something like “Do Not Track” on its own authority, and David Vladeck, director of the FTC’s consumer protection bureau, said “I do not think that under the F.T.C.’s existing authority we could mandate unilaterally a system of ‘do not track.”  Given the fact that Congress will be shared by two parties with quite different views of balance between business and consumer interests, it seems unlikely that Congress will act on that point anytime soon.

So while this is an important document, and reveals much about the way in which the FTC staff is thinking about privacy issues online, neither businesses nor consumers should presume that the most significant proposals will become industry requirements in the near term.  However, they do reflect the tension that continues to build between the benefits of data mining for business and the concerns of consumers.  That tension is unlikely to dissipate, and will almost certainly result in more enforcement and more litigation in the coming years — whether Do Not Track becomes a reality or not.