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The US Federal Trade Commission has issued its final report on the "best practices" companies should put in place regarding the collection of consumer information.

"If companies adopt our final recommendations for best practices – and many of them already have – they will be able to innovate and deliver creative new services that consumers can enjoy without sacrificing their privacy," said FTC chairman Jon Leibowitz in a statement accompanying the release of the report, "Protecting Consumer Privacy in an Era of Rapid Change".

"We are confident that consumers will have an easy to use and effective Do Not Track option by the end of the year," Leibowitz added, "because companies are moving forward expeditiously to make it happen and because lawmakers will want to enact legislation if they don't."

The FTC's final recommendations, a follow-up to its draft report issued last December, don't have the force of law, but the commission urges Congress to enact legislation that does.

The recommendations in Monday's report focus on three core areas, which the FTC defines as Privacy by Design, Simplified Choice for Businesses and Consumers, and Greater Transparency.

The first of those three concepts recommends that privacy protections be built into online offerings. Companies should, the report contends, ensure that their products and services provide "reasonable" data security and protection of data accuracy, and that the collection and retention of consumers' data be limited.

"Simplified Choice," the FTC notes, means that consumers should be allowed to choose what data a company can share about their online activities, and with whom that data can be shared. In addition, companies should provide a Do Not Track option that is a "simple, easy way" for customers to control tracking and sharing of their online perigrinations.

The FTC's transparency recommendations not only suggest that companies clearly explain to customers what data they're collecting, but also provide access to that data so that customers can review what information has been collected about their online activities.

The commission states that there has been ongoing voluntary progress in online privacy, and that companies have begun to compete with one another on the provision of privacy. "In response to Google's decision to change its privacy policies to allow tracking of consumers across different Google products," the report notes, "Microsoft encouraged consumers to switch to Microsoft's more privacy-protective products and services."

That said, the FTC argues that "self-regulation has not gone far enough," and that "basic privacy concepts like transparency about the nature of companies' data practices and meaningful consumer control are absent."

In light of the lack of industry-wide privacy safeguards, the report calls on Congress to enact legislation that is "technologically neutral and sufficiently flexible," and that includes "civil penalties and other remedies" to be made available for use against companies that fail to protect consumer privacy.

As has become traditional in reports issued by Obama-administration commissions, the FTC's lone Republican, J. Thomas Rosch – who recently called upon Congress to cut the commission's budget – appended his dissent to the report, saying in part that its recommendations "would install 'Big Brother' as the watchdog over [information collection] practices not only in the online world but in the offline world." ®

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