Federal Trade Commission chairman Jon Leibowitz said today that he expects Congress will take legislative action on Do Not Track consumer privacy initiatives if the advertising and data collection industries don’t implement by the end of the year a “persistent, easy to use and effective” solution that enables consumers to control how their online information is gathered and used.

Leibowitz complimented the progress made by the Digital Advertising Alliance (DAA), an umbrella group of seven trade associations representing the online marketing industry, and other industry groups and companies, but said more work needs to be done. The DAA is the group behind the AdChoices program that lets consumers opt out of having ads targeted to them based on their online behavior. It also supports giving consumers a browser-based Do Not Track option.

“We are very, very supportive of the entire Do Not Track policy and legislative ecosystem moving this forward,” Leibowitz said during a press conference announcing the release of an FTC report that puts forth principles on how consumers’ online data should be handled. “I am very hopeful it can be done without legislation,” he said, but added that if a solution doesn’t come to fruition by the end the year, there will be bipartisan support for Do Not Track legislation. No laws currently force companies to comply with the practices put forth in the FTC report and following the FTC’s recommendations is voluntary.

The new report says companies that handle consumer data should build in privacy protections at every stage of development, give consumers simple choices to let them decide what information is shared and with whom, and that they should disclose how they are collecting and using information. It also says consumers should be able to easily access the data that has been collected about them, and, if necessary, be able to correct inaccurate information. It calls on data brokers, who collect data from multiple sources and sell it to marketers, to create a web site where consumers can express their privacy preferences on how their data are used. The FTC report, titled “Protecting Consumer Privacy in an Era of Rapid Change: A Proposed Framework for Businesses and Policymakers,” expands upon a preliminary report the agency issued in December 2010.

The measures largely pertain to data collected by third parties, such as ad networks that track visitors to news, entertainment and other web sites, not e-commerce sites a consumer directly interacts with. The recommendations don’t restrict an e-retailer from using data it collects from a consumer about how he behaves on the e-retail site or sharing information with another company to complete a transaction, such as sharing the consumer’s mailing address with a shipper. It also excludes information shared to prevent fraud.

Last month, the White House proposed what it called a “bill of rights” aimed at protecting consumers’ privacy that would give consumers more control over how their information is collected and used online. That proposal follows the introduction of several bills in Congress that address consumers’ online privacy.  

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