FTC Considers Enacting Tougher Online Privacy Rules

The U.S. Federal Trade Commission plans to increase scrutiny of its consumer privacy enforcement standards by possibly implementing new regulations targeting online retailers.

With new Web 2.0 technologies, more online merchants are able to collect and store users' personal data, which has raised privacy concerns among certain advocacy groups and individuals. Meanwhile, concern about identity theft and online privacy issues have been escalated by a slew of publicly disclosed data breaches, which have captured national headlines.

In response, the FTC plans to closely examine issues surrounding consumer online privacy in the next six months, and look at ways to protect consumers from having their private data compromised, according to FTC Chairman Jon Leibowitz during an agency workshop held in Washington D.C. Monday.

During his opening comments, Leibowitz noted that technological advances have significantly reduced the cost of storing data online.

"These advances have created extraordinary benefits for consumers but also have tremendous implications for privacy," Leibowitz said, according to Reuters. "The computer cost of data collection seems to be approaching zero. Data storage costs are unbelievably low too."

"How do we treat vulnerable categories of consumers, such as children," Leibowitz added.

Leibowitz said that often consumers have little awareness that their personal data is being collected and stored online to be shared with advertisers and other organizations.

Online data regulation is still in its infancy. So far, the FTC has required online merchants to notify customers that data is being collected and give them the option to "opt out," as well as provide them resources for which to lobby complaints when their data has been compromised or they have otherwise been harmed. But Leibowitz acknowledged that those options haven't gone far enough or worked as effectively as the FTC had hoped.

Monday's workshop was one of three scheduled events around privacy planned by the FTC. So far, the FTC plans to collect and study the information from all three workshops, which could ultimately be used to help the agency devise a comprehensive strategy around online data protection, however Leibowitz declined to outline any specific proposed guidelines.

The FTC workshops on online privacy comes following complaints by consumer advocacy groups, which have urged the agency to take swifter action to protect users' online information, particularly financial and medical data. Over the last year, privacy advocates have pushed for tougher data privacy regulation against Internet and telecommunications giants Google and AT&T, maintaining that they have too much control over users' personal data.