Tuesday on corporate America for the self-regulatory steps it has taken to protect consumer privacy on the Internet.
"Industry is to be congratulated on self-regulation," said Orson Swindle at a conference held by the newsletter Privacy & American Business. "I applaud the way many businesses have approached privacy."
Though Mr. Swindle is a member of the commission's Republican minority and was expressing his own views, they reflect a softening in what had been a severely critical view of banks' and other businesses' on-line privacy measures. The FTC and bank regulators had been threatening to take action if private industry did not. The federal bank and thrift agencies said Tuesday that most of the biggest financial institutions on the Web do not meet FTC standards. (See article on page 3.)
In a report to Congress in July that was approved by three of the four FTC commissioners -- including Mr. Swindle and Chairman Robert Pitofsky -- the FTC pointed to "much progress" and said "on-line businesses are providing significantly more notice of their information practices than they were last year."
The report, "Self-Regulation and On-line Privacy," said that "major challenges to self-regulation" persisted, but that legislative redress did not seem necessary.
Mr. Swindle said the threat of legislative action has not disappeared. But efforts by consortia -- such as the NetCoalition.com, site that major on-line companies use to encourage good privacy practices -- are mitigating that threat.
"I believe the consumer and a responsive business community will carry the day," Mr. Swindle said. "Free enterprise is not perfect, but it is something that can work. It will require people insisting on their privacy being protected."
One factor in business' favor, Mr. Swindle said, is that the FTC is physically incapable of regulating all commercial Web sites, which number four million and are increasing by 300,000 a month.
"Self-regulation will do a far better job than government regulation," Mr. Swindle said. "I'm confident that the industry is moving forward on these issues."
Consumer privacy advocate Evan Hendricks, publisher of the Washington-based newsletter Privacy Times, was critical of Mr. Swindle's record on privacy. He "has yet to meet a privacy invasion he didn't like," Mr. Hendricks said in an interview.
Mr. Hendricks said Mr. Swindle cast the only dissenting vote in an FTC enforcement action this year against two Colorado information brokers who were charged with illegally obtaining and selling consumer information.
Among federal agencies, the FTC has been the most active in addressing Internet privacy issues. Since 1994, when it took up its first Net-related case, the agency has initiated 100 actions against companies that it deemed to have crossed the privacy line, according to David Medine, the FTC's associate director for financial practices.
In an interview Tuesday, Mr. Medine characterized the agency's position on businesses and Internet privacy as "let's give self-regulation more time."
"The FTC is really emerging as our national federal privacy agency," said Robert Belair, an attorney with the Washington-based law firm Mullenholz, Brimsek & Belair.
In past years, FTC officials have been highly critical of how some marketers and financial institutions have conducted themselves on the Internet. Former Commissioner Christine Varney had harsh words for the industry's early efforts to protect consumers' information on-line. She left the FTC in 1997 and joined the Washington law firm Hogan & Hartson. She has assumed a leading role in helping businesses to develop self-regulatory policies through her work in the On-line Privacy Alliance.
For the last two years, the FTC has been monitoring Web sites to see how many major ones post notices on fair information practices. A recent survey conducted for the FTC by Georgetown University professor Mary Culnan found that 10% of the biggest Web sites post privacy policies, up from 2% a year earlier, Mr. Medine said.
"Clearly, industry is moving in the right direction," he said, "But we will survey again next year."
Mr. Hendricks said the FTC, "in being cautious (on privacy), is tilting toward the industry view. It is like the parent that has shied away from disciplining a bad child."