Commerce Department Unveils Policy Framework for Protecting Consumer Privacy Online While Supporting Innovation

Calls for consideration a new set of principles – A “Privacy Bill of Rights”
FOR IMMEDIATE RELEASE: 
December 16, 2010
News Media Contact: 
Commerce Department, Office of Public Affairs, 202-482-4883
 

The Department of Commerce today issued a report detailing initial policy recommendations aimed at promoting consumer privacy online while ensuring the Internet remains a platform that spurs innovation, job creation, and economic growth.  The report outlines a dynamic framework to increase protection of consumers’ commercial data and support innovation and evolving technology. The Department is seeking additional public comment on the plan to further the policy discussion and ensure the framework benefits all stakeholders in the Internet economy.

    “America needs a robust privacy framework that preserves consumer trust in the evolving Internet economy while ensuring the Web remains a platform for innovation, jobs, and economic growth. Self-regulation without stronger enforcement is not enough. Consumers must trust the Internet in order for businesses to succeed online.” said Commerce Secretary Gary Locke. “Today’s report is a road map for considering a new framework that is good for consumers and businesses.  And while our primary goal is to update the domestic approach to online privacy, we are optimistic that we can take steps to bridge the different privacy approaches among countries, which can help us increase the export of U.S. services and strengthen the American economy.”

Today’s report, based on extensive public input and discussion, recognizes the growing economic and social importance of preserving consumer trust in the Internet.  Global online transactions are currently estimated at $10 trillion annually. Between 1998 and 2008, the number of domestic IT jobs grew by 26 percent – four times faster than U.S. employment as a whole – with IT employment projected to increase another 22 percent by 2018.

The report notes that the nation’s privacy framework must evolve to keep pace with changes in technology, online services and Internet usage. To keep the digital economy growing, consumers need more transparency and control when it comes to the use and protection of their personal information, and innovators need greater certainty in order to meet consumer privacy expectations and the array of regulatory requirements they face around the world.

The following are key recommendations in today’s preliminary report, Commercial Data Privacy and Innovation in the Internet Economy: A Dynamic Policy Framework:

Consider Establishing Fair Information Practice Principles comparable to a “Privacy Bill of Rights” for Online Consumers
The report recommends considering a clear set of principles concerning how online companies collect and use personal information for commercial purposes. These principles would be recognized by the U.S. government and serve as a foundation for online consumer data privacy. They would build on existing Fair Information Practice Principles (FIPPs) that are widely accepted among privacy experts as core obligations.

The adoption of baseline FIPPs, akin to a “Privacy Bill of Rights. Should prompt companies to be more transparent about their use of consumer information; to provide greater detail about why data is collected and how it is used; to put clearer limits on the use of data; and to increase their use of audits and other ways to bolster accountability.

Consider Developing Enforceable Privacy Codes of Conduct in Specific Sectors with Stakeholders; Create a Privacy Policy Office in the Department of Commerce
In considering new policies for commercial privacy, the government should enlist the expertise of industry, consumer groups, privacy advocates, and other stakeholders.  In particular, the report recommends establishing a privacy policy office in the Department of Commerce that would work with the FTC, the Executive Office of the President, and other Federal entities, to examine commercial uses of personal information and evaluate whether uncertainty or gaps in privacy protections exist. The new office would convene stakeholder dialogues, and, with respect to specific areas of concern, help develop enforceable privacy codes of conduct.

Encourage Global Interoperability to Spur Innovation and Trade
Reducing regulatory barriers to trade is a high priority for the Obama administration.  Currently, disparate privacy laws have a growing impact on global competition.  The report recommends that the U.S. government work together with its trading partners to find practical means of bridging differences in our privacy frameworks. Collaborations with other privacy authorities around the world can reduce the significant business compliance costs.  This global engagement could play a key role in a new dynamic privacy framework.

Consider How to Harmonize Disparate Security Breach Notification Rules
As an initial step towards consideration of a new privacy framework, the report recommends looking at ways in which to harmonize the rules that set standards for businesses to notify customers about commercial data security breaches.  This comprehensive national approach to commercial data breaches would provide clarity to consumers, streamline industry compliance, and allow businesses to develop a strong, nationwide data management strategy.

This national approach, enacted through Federal law, could help to reconcile inconsistent state laws, authorize enforcement by the FTC, and preserve state authorities’ existing enforcement power.  This recommendation is not aimed at preempting federal security breach notification laws for specific sectors, such as healthcare.

Review the Electronic Communications Privacy Act for the Cloud Computing Environment

The report recommends that the Obama Administration review the Electronic Communications Privacy Act (ECPA) to address privacy protection in cloud computing and location-based services. A goal of this effort should be to ensure that, as technology and market conditions change, ECPA continues to appropriately protect individuals’ privacy expectations and punish unlawful access and disclosure of consumer data.

In order to gather stakeholder input and refine the report’s preliminary recommendations, the Commerce Department will seek public comment and publish questions from the report in a Federal Register notice next week. The Commerce Department’s Internet Policy Task Force will also continue to work with others in government to engage the domestic and global privacy community, and will consider publishing a refined set of policy recommendations in the future.

To download a copy of the report, visit http://www.commerce.gov/node/12471.