... observed that self-regulation "appears to be working towards" a more draconian end: a do-not-track option for consumers, although he suggested congressional interest offered an extra incentive.
Says Leibowitz: "We are confident that consumers will have an easy-to-use and effective 'do not track' option by the end of the year because companies are moving forward expeditiously to make it happen and because lawmakers will want to enact legislation if they don't."
The latest version of the Firefox browser already allows users to switch-off browsing histories and tell websites "I do not want to be tracked."
Reports Philly.com: "The FTC perceives there to be a need for broad privacy legislation and specific protections to address problems such as lax data security and the activities of data brokers - companies that, without the consent or even knowledge of most consumers, collect and traffic in the data we leave behind as we travel through virtual and brick-and-mortar worlds."
The FTC report recommends that companies be held responsible for what it called "privacy by design," defined as practices that "build in privacy at every stage of product development."
Like the new Consumer Privacy Bill of Rights announced by President Barack Obama last month, the FTC's framework focuses on the transparency of information-handling practices and on consumer expectations that arise from the context in which personal information is requested.
Ioana Rusu, regulatory counsel at Consumers Union, said expectations about privacy were routinely confounded by the data-brokerage industry, in which little-known companies such as Axciom collect and trade data about consumers. Information from brokers can be used directly for marketing or combined with data from other sources to build more detailed profiles of individual consumers.
To quote Rusu: "The FTC is basically saying it's really problematic that entities that have no real relationship with consumers are amassing huge amounts of information about them. The consumer doesn't have any way of controlling that information, or even knowing that it exists or what it's being used for."
Consumers' expectations are also at the heart of a lawsuit against Google filed in Philadelphia last week. The suit contends that people who use Google's online services or who own mobile devices based on its Android operating system are being harmed by a new, unified privacy policy that Google implemented on March 1.
The suit says Google seeks to boost its online advertising revenue by mingling data from the dozens of free services it offers, such as its search engine, Gmail, and YouTube.
The suit argues: "Google's new privacy policy is nothing more than Google's effort to garner a larger market share of advertising revenue by offering targeted advertising capabilities that compete with or surpass those offered by social networks, such as Facebook, where all of a consumer's personal information is available in one site."
A Google spokesman declined to comment on the suit, saying the company [famed motto: "Don't be evil"] had not yet had time to review it. But Google, which says it has made few changes in its underlying data-handling practices, has criticized other class actions prompted by its unified policy.
"We believe these cases are without merit, and we intend to defend them vigorously," Google said in response to the earlier suits.
"Our updated privacy policy makes our privacy practices easier to understand, and it reflects our desire to create a seamless experience for our signed-in users. We undertook the most extensive notification effort in Google's history, and we're continuing to offer choice and control over how people use our services."