Survey: New U.S. Privacy Laws Needed To Protect Internet Consumers

A study by the Annenberg Public Policy Center shows consumers misunderstand how Internet companies use their personal data
WASHINGTON (AP) -- American consumers fundamentally misunderstand how Internet companies use their personal information, according to a new survey that concludes tougher federal privacy laws are needed.

The study from the Annenberg Public Policy Center at the University of Pennsylvania, being released Wednesday, said 86 percent of surveyed adults believe companies should be required by law to standardize the promises they make on Web sites about how personal information will be protected.

The findings renewed demands for fresh U.S. privacy laws even as the threat of terrorism and heightened security to meet it have supplanted privacy as a cornerstone for technology policy debates in Washington.

Timothy Muris, chairman of the Federal Trade Commission, has said the agency would step up enforcement of existing privacy laws, and privacy has not been a major issue in congressional debates.

"This kind of privacy issue has sort of fallen down the list of things that legislators have paid attention to over the last couple years," said Robert Pitofsky, former FTC chairman.

Industry groups largely beat back efforts to pass new privacy laws at the height of the E-commerce boom three years ago. They convinced Congress that companies could be trusted to protect online privacy of their customers voluntarily except when a person's financial or health data were involved.

Lawmakers relented over the objections of the FTC under Pitofsky, which concluded in a May 2000 report that "industry efforts alone have not been sufficient."

Researchers said the new survey of 1,200 adult Internet users illustrates a significant gap between increasingly sophisticated collection techniques by Internet marketers and an alarming lack of knowledge by Web surfers about how companies track their online movements and use the information.

For example, 57 percent of the adults surveyed who use the Internet at home told researchers they believed incorrectly that when a Web site publishes a privacy policy, it will not share their personal information with other Web sites or companies. Such policies typically describe what information is collected about visitors and how it is shared among companies, subsidiaries and affiliates.

Nearly two-thirds of adults admitted never searching for information about how to protect their privacy on the Internet, and 40 percent confessed they knew "almost nothing" about how shopping sites collect and use their personal information.

Researchers cited descriptions by The Gator Corp. of Redwood City, Calif., which makes advertising technology built into popular music-sharing software and claims 12 million users. Gator tells prospective advertisers it can display baby food ads on computer screens of young parents by quietly monitoring whether they visit Web sites about childbirth, baby names and other baby products.

"People simply don't have any idea how data flow works with respect to the Internet," said Joseph Turow, a communications professor at Annenberg. "It's the most important finding: that a large percentage of the American population seems not to understand the complex uses of their data by marketers."

Critics of new Internet privacy laws said the survey, conducted for Annenberg by ICR/International Communications Research of Media, Pa., was flawed.

"These questions seem to have been asked in a way that is going to elicit the types of answers they got," said Tom Lenard, vice president for research at the Progress and Freedom Foundation, a Washington think tank.

A PFF study in March 2002 found that Internet sites appeared to be collecting less personal information from users and doing a slightly better job of explaining how sensitive data were used.

Supporters enthusiastically embraced the new survey as the latest evidence for new privacy laws.

"The overwhelming percentage of consumers continue to believe that some legal framework would help them protect their information and that personal information is still an important concern," FTC Commissioner Mozelle Thompson said. "Congress is still looking at privacy issues and privacy legislation. This isn't going away."

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