White House follows EU’s lead with new Internet ‘rules of the road’

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The White House is following the lead of the European Union in advocating for new Internet privacy laws which put consumers’ interests ahead of those of cyber-businesses, policy analysts told The Daily Caller.

According to a report released last week by the Obama administration, Internet browser purveyors are using tracking technology to monitor consumers’ online behavior and lists of the websites they visit. That information is resold to marketers who send targeted, customized ads to the consumers’ computers or smartphones.

The new “Internet privacy principles” announced last week by the administration are intended to lead to new laws protecting the public from some privacy-averse policies of companies like Apple, Google, Microsoft and Facebook.

This administration’s proposal asks Congress to codify the new rights, which include granting the federal government more police power. The Federal Trade Commission would be empowered with “direct enforcement authority” to ensure consumer data privacy, according to the strategy.

Overall, the Obama proposal includes seven principles to protect consumer privacy online, White House aides told reporters last week in a telephone briefing.

The proposed rules would also include an “enforceable code of conduct” that Internet companies would have to comply with, or face litigation or civil penalties, under the expanded FTC power. That agency’s power is currently more limited.

“A statute that allows the FTC to enforce the Consumer Privacy Bill of Rights directly would provide flexibility and permit the FTC to address emerging privacy issues through specific enforcement actions governed by applicable procedural safeguards,” the White House said in its report.

The Obama administration proposal “mimics” policy ideas being put forth in Europe, Darren Hayes, a computer forensics and security expert at Pace University in New York, told TheDC.

The “online privacy and data protection” laws are aimed at providing a shield to consumers in Europe from unsavory marketing practices, Hayes said. Legal journals in the U.S. have advocated the European approach for years, he said, claiming its regulations were more sophisticated than the “wild west” mentality that has prevailed in U.S. Internet culture since the 1990s.

The administration and observers are referring to the proposal informally as the “Do Not Track” measure.

But “’do not track’ really means ‘do not target’ because advertisers and websites can still collect all of your data like they did before,” said Sarah Downey, a lawyer with Abine, an Internet privacy company. “The difference is they can’t use that information to target you with personalized ads.”

Other experts, however, believe the government should not be involved in this area of the economy at all, and that consumers should continue to protect themselves online without Washington’s help.

“Not to put too fine a point on it, but the solution and problem is not technology,” explained Dr. Jacob D. Furst, director of the information assurance center at DePaul University. “It’s behavior.”

“To protect themselves,” Furst told TheDC, “consumers need to be smart about their online behaviors.”

He noted that nearly every online merchant already posts a privacy policy on its website. Many political sites — former Massachusetts Gov. Mitt Romney’s presidential campaign website, for instance — also have such privacy policies.

Consumers should read these policies, Furst said, and if they don’t like what the site proposes to do with the data coming from their visits, they can go elsewhere.

“We must all be guardians of our own privacy,” he said. “If we don’t care enough to protect it, no government-sponsored program will do it for us.”

Some business leaders fear unintended economic consequences from the Obama administration’s proposal, which might extend far enough to hamper e-commerce by driving up the cost of doing business online.

“This aggressive move by the president may largely affect the cost for targeted ads online,” said Kenneth Wisnefski, CEO of the online ad agency WebiMax.

“For example, the cost of bids on certain keywords for targeted advertisements will most likely increase as consumers block certain advertisements,” he told TheDC. “This may actually drive up the cost for targeted ads in the long run.”

Google, Facebook, Yahoo and others “may get hurt from this as advertisers cut back their campaigns,” he added, “if their average CPM [cost per thousand ad impressions] is dropping significantly.”

The White House, however, strongly disagrees, seeing the issue as one of fundamental fairness to consumers.

“The Internet Bill of Rights is so important,” Obama said. “American consumers can’t wait any longer for clear rules of the road that ensure their personal information is safe online.