Internet self-regulation ‘flawed’

President Clinton’s leading Internet adviser, Ira Magaziner, has admitted that attempts to foster effective self-regulation of interactive marketing may fail.

Magaziner, speaking in London last week, admitted that the Clinton administration’s laissez-faire approach to Net marketing may “flop”, prompting Congress to side with European Union proposals to tighten regulation on data collection over the Net.

But the Presidential adviser said that over-zealous regulation of data collection and direct marketing in the digital arena may also fail to remedy worst cases of Net abuse.

According to Magaziner, the introduction of tough privacy protection laws risked creating a false sense of security among consumers if such laws proved unenforceable.

“There’s 10,000 sites launching every week,” he said in a speech to the Royal Institute of International Affairs. “There’s no way a government agency can monitor that.”

His remarks come only three weeks after a call by the US’ Federal Trade Commission (FTC) for a crackdown on the data collection practices of US sites – particularly ones targeting children. According to an FTC survey, 85 per cent of commercial sites collected personal data on site visitors in some form, while only 14 per cent gave any notice on privacy policies to site visitors.

The FTC is concerned over the poor practice of many commercial Internet sites targeting children, claiming 89 per cent of these sites collect personally identifiable data from the children themselves.

Less than a quarter of sites asked children to get parental permission before submitting information. This permission is required for sites to meet the UK’s Data Protection Act. Only seven per cent promised to notify parents of data collection.

This comes despite several attempts backed by the White House and US Direct Marketing Association over the past year to enforce codes on transparency and best practice in the collection of personal data. Major US Website owners, including Walt Disney and Time Warner, last week sought to allay growing Congressional concerns over online data collection by adopting rules proposed by the corporate umbrella group Online Privacy Alliance.

The DMA in the UK, meanwhile, says it agrees that the targeting of children revealed by the FTC study gives rise for concern. But it argues that existing UK legislation and self-regulation, if applied properly, is adequate to curb abuse.

“We believe that the way in which data is collected from children over the Net needs to be addressed,” says DMA spokesman Martin Bartle. “The Data Protection Act has clear guidelines, and these rules should apply as much on the Net as they do anywhere else.”

The ongoing “Child Track” poll in the UK, carried out by Carrick James Market Research, reveals that the Internet could provide an increasingly significant route for targeting children as well as adults.

The research shows that more than six per cent of children between the ages seven to 14 now have online access at home, compared with only two per cent two years ago.

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