The F.T.C.’s proposal, a broad framework for commercial use of consumer data, would encourage companies to promote consumer privacy when developing new products and services, among other provisions. Do-not-track controls would let Web users decide whether Internet sites and advertisers could collect information about their browsing and buying habits as well as other personal data.
The recommendations, in a report released by the commission that solicits public comment over the next two months, are based on the commission’s belief that current practices regarding privacy protection have not kept pace with the rapid growth of technology and new business models.
Industry self-regulation, the preferred model among advertising companies and many online retailers, has “failed to provide adequate and meaningful protection” for consumers, the report said.
Now, the trade commission hopes to adopt an approach that it calls “privacy by design,” where companies are required to build privacy protections into their everyday business practices. That approach would include retaining data on consumer preferences and online browsing activity only as long as needed and deleting data on a regular basis.
The report also recommends that companies adopt simpler, more transparent and streamlined ways of presenting consumers with their options rather than the “long, incomprehensible privacy policies that consumer typically do not read, let alone understand.” And the report recommends that data brokers give consumers “reasonable access” to whatever data they have collected.
While the report is critical of many current industry practices, the commission will probably need the help of Congress to enact some of its recommendations.
“I do not think that under the F.T.C.’s existing authority we could mandate unilaterally a system of ‘do not track,’ ” David Vladeck, the director of the commission’s bureau of consumer protection, said Wednesday at a conference sponsored by Consumer Watchdog, a nonprofit group.
“There are ways we could coax, cajole and charm industry in that direction,” Mr. Vladeck said. But, he added, “If the decision was made by Congress that ‘do not track’ should be put in place immediately, it would take an act of Congress.”
There is support in Congress for doing so, however, and the House Subcommittee on Commerce, Trade and Consumer Protection will take up the matter at a hearing Thursday that will examine the feasibility of creating a simple and universal method of opting-out of being tracked online.
Christopher Soghoian, a privacy and security researcher, said at the Consumer Watchdog conference that most consumers do not have privacy software and that the use of privacy options in most Internet browsers “doesn’t do much.”
Because many of the companies that make Web browsers are also supported by advertising networks, “the design decisions are motivated by a desire not to hurt their advertising divisions,” Mr. Soghoian said.
“The situation right now is laughable,” he added. “There certainly isn’t a single one-stop shop.”
Edward Wyatt reported from Washington and Tanzina Vega from New York.
This article has been revised to reflect the following correction:
Correction: December 1, 2010
An earlier version of this article misspelled David Vladeck's name as Vladek.
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