Protecting Consumers' Privacy Online  

The Internet provides unprecedented opportunities for the collection and sharing of information
from and about consumers, but studies show that consumers have very strong concerns about the security and confidentiality of their personal information in the online marketplace. Many consumers also report being wary of engaging in online commerce, in part because they fear that their personal information can be misused.

These consumer concerns present an opportunity for you to build on consumer trust by implementing effective voluntary industry-wide practices to protect consumers' information privacy. The FTC has held a number of workshops for industry, consumer groups, and privacy advocates to explore industry guidelines to protect consumers' privacy online.

In June 1998, the FTC issued Online Privacy: A Report to Congress. The Report noted that while over 85 percent of all websites collected personal information from consumers, only 14 percent of the sites in the FTC's random sample of commercial websites provided any notice to consumers of the personal information they collect or how they use it. In May 2000, the FTC issued a follow-up report, Privacy Online: Fair Information Practices in the Electronic Marketplace (PDF file). While the 2000 survey showed significant improvement in the percent of websites that post at least some privacy disclosures, only 20 percent of the random sample sites were found to have implemented four fair information practices: notice, choice, access, and security. Even when the survey looked at the percentage of sites implementing the two critical practices of notice and choice, only 41 percent of the random sample provided such privacy disclosures. You can access the FTC's privacy report at http://www.ftc.gov/.

The Children's Online Privacy Protection Act (COPPA) and the FTC's implementing Rule took effect April 21, 2000. Commercial websites directed to children under 13 years old or general audience sites that have actual knowledge that they are collecting information from a child must obtain parental permission before collecting such information.

The FTC also launched a special site at http://www.ftc.gov/kidzprivacy to help children, parents, and site operators understand the provisions of COPPA and how the law will affect them.