URGES QUICK INDUSTRY ACTION ON RULES TO ENFORCE INTERNET PRIVACY

Washington-- Secretary William M. Daley opened the Commerce Department's two-day online privacy summit today by challenging the private sector to implement enforceable privacy protections to ensure that consumers can feel confident that their personal information is safe online.

"I see this conference as your chance to show me your goods. And I very much want to, in turn, show the President why industry leadership is much better than Washington intervention," said Secretary of Commerce William Daley. However, "Articulating principles isn't adequate. There has to be some meaningful consequences to companies that don't comply."

The Clinton Administration is closely examining a private sector proposal to protect privacy in business transactions on the Internet, but industry must move more swiftly to draft an effective plan to enforce privacy rules or face inevitable government regulation of electronic commerce, Secretary Daley said.

Daley said his first impressions of a proposal by the Online Privacy Alliance, a group of 50 companies and business associations, was positive, but expressed disappointment over the group's request for additional time until September 15 to come up with a proposal to enforce privacy on the Internet. Daley added he understood the Better Business Bureau also has announced that it will develop a privacy program including enforcement and dispute resolution procedures. In addition, Daley indicated that TRUSTe, a non-profit organization that provides privacy "seals" is set to require all members to abide by new, tough, fair information practices.

"We will be closely looking over the Alliance's proposal in the next few days," Daley said in his speech to over 400 summit participants which included U.S. policy makers, academic and industry representatives and consumer advocates.

"Frankly, I am disappointed I have to wait another day to hear how the industry plans to police itself," Daley said. "Articulating principles isn't adequate," Daley said. "There has to be a way to enforce this that the consumer can trust, or this won't work--there has to be some meaningful consequences to companies that don't comply with privacy rules," Daley added. But he also expressed hope that the Alliance will submit its proposals prior to September 15.

Daley said public concern over Internet privacy is so high that the government will have no choice but to intervene unless industry puts teeth in its self-regulatory plan. "More than 80 percent of Americans are concerned about threats to their privacy when they are on-line. More than 90 percent want business telling them how they will use personal information. Consumers will want government to intervene," Daley said. "I want self-regulation to work, but if self-regulation doesn't work, we'll have to consider other options," Daley told the conference.

Fostering Electronic Commerce, with its enormous potential for economic growth, is a major Clinton Administration initiative. President Clinton last July outlined a strategy for private sector and government action to foster increased business through the Internet while preserving it as a medium that defines the market through competition and consumer choice.

A key element in the President's plan articulated in his "Framework for Global Electronic Commerce", is a self-regulatory role for the industry with government providing the atmosphere where electronic commerce can flourish. The President's July directive gave the Commerce Department a leading role in facilitating electronic commerce and charged the Department with overseeing seven of 13 electronic commerce policy initiatives: privacy, intellectual property, patents, domain names, uniform commercial code and electronic authentication, and content and standards.

The Department of Commerce has been asked to report to the President on industry efforts to establish self-regulatory regimes to ensure privacy online and to develop technological solutions to protect privacy. The President has directed the Commerce Department to ensure that means are developed to protect children's privacy online.

NTIA Assistant Secretary of Commerce Larry Irving also addressed the conference participants who are meeting to discuss how the protection of privacy regarding personal information is critical to the success of on-line commerce. The conference is serving as a forum for experts to explore how industry self-regulation can be effective. The panels are addressing the benefits, challenges, and limitations of self-regulatory privacy regimes.

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