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Online Privacy Protection: Issues and Developments (CRS Report for Congress)

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Release Date Jan. 11, 2001
Report Number RL30322
Report Type Report
Authors Gina Marie Stevens, American Law Division
Source Agency Congressional Research Service
Summary:

It is routinely acknowledged that the success of the Internet and electronic commerce depends upon the resolution of issues related to the privacy of online personal information. This paper discusses some potential threats to the privacy of online personal information, and efforts by businesses, governments, and citizens to respond to them. The paper also provides an overview of the legal framework for the protection of personal information. Some advocate legal recognition of a right to "information privacy" for online transactions. The term "information privacy" refers to an individual's claim to control the terms under which personal information is acquired, disclosed, and used. In the United States there is no comprehensive legal protection for personal information. The Constitution protects the privacy of personal information in a limited number of ways, and extends only to the protection of the individual against government intrusions. However, many of the threats to the privacy of personal information occur in the private sector. Any limitations placed on the data processing activities of the private sector will be found not in the Constitution but in federal or state law. There is no comprehensive federal privacy statute that protects personal information held by both the public sector and the private sector. A federal statute exists to protect the privacy of personal information collected by the federal government. The private sector's collection and disclosure of personal information has been addressed by Congress on a sector-by-sector basis. With the exception of the Children's Online Privacy Protection Act of 1998, none of these laws specifically covers the collection of online personal information. The federal government currently has limited authority over the collection and dissemination of personal data collected online. President Clinton's Information Infrastructure Task Force supports industry standards for privacy protection. The Federal Trade Commission Act prohibits unfair and deceptive practices in commerce, and the Commission has brought enforcement actions to address deceptive online information practices. In June 1998, the Federal Trade Commission presented a report to Congress titled Privacy Online which examined the information practices of over 1400 commercial Web sites, and found that the vast majority of online businesses have yet to adopt even the most fundamental fair information practice. The Commission issued a new report to Congress in July 1999 on Self-Regulation and Online Privacy and found that the vast majority of the sites surveyed collect personal information from consumers online, and that the implementation of fair information practices is not widespread. The FTC issued a new report in May 2000 after another survey of web sites. Notwithstanding measurable gains since the 1999 report to Congress, a majority of the Commission found that self-regulation alone, without some legislation, is unlikely to provide online consumers with the level of protection they seek and deserve, and recommended that Congress consider legislation to complement self-regulation. This report does not track legislation pending before Congress.