quote:

The Federal Trade Commission wants to give parents more control over what information websites can collect about their children.

The FTC is proposing changes to the Children's Online Privacy Protection Act that include requiring parental consent for websites to collect a broader range of information about children under age 13, including location. They also would require parental permission for a website to use tracking software, known as cookies, to build a profile about a child and monitor children's online activities for purposes such as targeting ads.

The move marks a major action by federal regulators to bolster privacy protections for Internet users.

The proposed changes, however, are likely to face stiff opposition from Internet and advertising companies, as new rules would drastically change how they currently operate. Websites currently only have to obtain parental consent when collecting personal information about children such as their name and email address.

The FTC's proposed changes to the decade-old children's privacy rules come amid escalating scrutiny from federal regulators and lawmakers of the fast-growing business of tracking Internet users and selling personal details about their lives such as their online purchases and social-networking activities.

"The Internet revolution makes snapshot photography and wiretap technology look like child's play," FTC Commissioner Julie Brill said during a speech Thursday at the International Association of Privacy Professionals. Ms. Brill said that the level of online tracking is unprecedented, largely undetected by the consumer and raises serious privacy concerns.

As proof that the use of consumer data is wading into dangerous territory, Ms. Brill cited a 2010 story from The Wall Street Journal's "What They Know" series on online privacy issues about a life insurer that used tracking data about consumers to help determine their life expectancy, rates and insurance coverage.

In addition to Thursday's proposed changes, the FTC has been calling for companies to build stronger privacy protections for consumers and be more transparent about information they collect. The commission also has launched investigations of Internet, advertising and mobile companies for deceptive online privacy practices or violating established guidelines.
In the "What They Know" series, the Journal last year reported that popular children's websites install more tracking technologies on personal computers than the top websites aimed at adults.
Internet and advertising industry groups argue that many of the changes are unnecessary.

The Direct Marketing Association disputed the FTC's proposed change that would require parental consent before using tracking cookies because the programs don't always identify children but rather the computer. The trade group said the definition of "personal information" only should include information that could be used to directly contact or communicate with a child.
"We think they may have gone a little too far," said Jerry Cerasale, senior vice president of government affairs for the Direct Marketing Association.

The Interactive Advertising Bureau, which represents more than 500 media and Internet companies, took issue with a proposed change that would require self-regulatory groups to audit their members annually and report the results to the commission. The group said it supports random audits but that yearly audits would create a "dangerous precedent which would impose burdensome and largely unnecessary expenses on the very companies that are proactively taking steps to protect children."

Meanwhile, lawmakers and privacy advocates applauded the commission's proposed updates.

"Given the potential for this sensitive data to be misused to endanger a child, the commission's proposal in this area is a much-needed step," Rep. Edward Markey (D., Mass.), said in a statement. Mr. Markey, along with Rep. Joe Barton (R., Tex.), introduced a children's online privacy bill earlier this year to update existing rules and would extend privacy safeguards to teenagers. The bill now is in committee. "Strong legal requirements along with vigilant enforcement are needed to protect children from tracking and targeting on the Internet," Mr. Markey said.

The FTC is soliciting comments on its proposed changes until Nov. 28. The commission last reviewed the Children's Online Privacy Protection Act in 2005, without making changes.