US inches closer to EU corporate privacy policy

The US Federal Trade Commission (FTC) announced Thursday that it will step up its investigations into companies who violate their own privacy policies.

The FTC move is intended to put teeth into privacy seal programmes like TrustE and BBBOnline, allowing the US to calm European fears over self-regulation while stopping short of adopting European-style privacy legislation.

The FTC will now fast-track for government investigation any complaints that are forwarded from seal programmes.

David Medine, an associate director with the FTC's Bureau of Consumer Protection, said: "In cases where a company is not complying with its stated privacy policy, we will want to see three things. We want the seal taken away, we want the world to know that the seal was taken away, and we will make it a priority to investigate if it's forwarded to us."

Medine also noted that within the next 12 months, the FTC will form a taskforce to address the issue of individual access to personal information held in corporate databases. The issues of access and enforcement have been sticking points in data protection negotiations with the EU. He said that despite these moves, the US is unlikely to form an Office of Data Protection like those found in most European countries. "There's a real cultural difference there," he said. "Americans are sceptical about government being involved in privacy."

Christine Varney, partner at US law firm, Hogan and Hartson, agreed, and she noted that in the US there is simply an obligation on the part of consumers to read the privacy policies of each site they give personal information to. But Jason Catlett, CEO of Junkbusters, said US consumers may eventually rebel against this obligation in favour of standardised data protection. According to Catlett, "Right now, companies think they can get away with forcing consumers to put up with this. We are creeping towards European-style law."