US regulator backs 'do not track' list for Web users

US regulators backed the creation of a "do not track" option for the Internet that would limit the ability of advertisers to collect consumers' data.

In a preliminary staff report, the Federal Trade Commission said on Wednesday that while companies generally manage consumer information responsibly, there are exceptions.

"Self-regulation in privacy has not worked adequately," said FTC Chairman Jon Leibowitz. "A legislative solution will surely be needed if industry doesn't step up to the plate."

Leibowitz said he supported creation of a mechanism that allows consumers to opt out of some tracking, adding that Congress would probably need to act, which may be difficult because of legislative gridlock next year.

Senator John Kerry, a Massachusetts Democrat, said on Wednesday that he planned to introduce legislation that would require companies to secure data and inform consumers about what data is being collected.

"Consumers should be given a simple mechanism for opting out of the process," Kerry said in a statement.

Republicans in the House of Representatives, like Representative Joe Barton, have said, without offering details, they would focus on privacy issues.

Any legislation could be two years off, at minimum, said Amy Mushahwar, a privacy expert with Reed Smith, who predicted industry would strike a deal with the government.

If consumers gain more control over their data, the biggest losers could be companies serving third-party ads, said Mushahwar. "Those are the targets," she said.

Privacy expert Lisa Sotto at law firm Hunton & Williams said the industry needed to pay close attention to the report. "The report gives industry a strong sense of where there is likely to be future FTC enforcement."

The FTC staff report also urged that special care be taken with information about sensitive topics such as finances, health, children or an individual's location.

"Before any of this data is collected, used or shared, staff believes that companies should seek affirmative express consent," the report said.

The agency's report urged the development of ways to build privacy into the design of business practices by, for example, collecting only the data that is needed and disposing of it when it is no longer being used.

The agency also proposed that company privacy policies be simpler, clearer and shorter.

"Staff also proposes providing consumers with reasonable access to the data that companies maintain about them, particularly for companies that do not interact with consumers directly, such as data brokers," the report said.

"In addition, all entities must provide robust notice and obtain affirmative consent for material, retroactive changes to data policies."

The report comes as the FTC is under pressure to contain the growing strength and savvy of companies collecting Internet users' personal data and selling it to advertisers.

A recent report by a privacy group found, for example, that some websites that present themselves as a way for ill people to connect with other people with the same ailments were actually created by companies to collect and sell data on those people to market medicines to them.

A final version of the FTC report will be released next year after taking into account comments from interested parties.

US targets websites selling counterfeit goods

On one of the year's busiest Internet shopping days, US federal law enforcement announced a crackdown that blocked 82 domain names of far-flung commercial websites to keep them from peddling counterfeit merchandise and illegal copies of music and software.

Nearly 100 million people shop on "Cyber Monday," a day when consumers return to work from the long Thanksgiving weekend. Many buy items online.

Counterfeiters are prowling the back alleys of the Internet, waiting to unload shoddy presents unlikely to bring any holiday cheer, John Morton, head of immigration and customs enforcement at the US Homeland Security Department, told a news conference.

Attorney General Eric Holder said federal law enforcement agents got court orders allowing them to seize the domain names after making undercover purchases from online retailers and confirming that the items sold were counterfeit or infringed on copyrights.

The move was applauded by the Motion Picture Association of America and the Recording Industry Association of America.

Anyone attempting to access one of the websites will find a banner saying that the domain name has been seized by federal authorities.

The counterfeit goods include sports equipment, shoes, handbags, athletic apparel and sunglasses. The copyright infringement covers copies of DVDs, music and software.

Most of the counterfeit goods are produced and shipped from China.

On a trip to Hong Kong and to Beijing last month, Holder told law enforcement counterparts from China and around the world to do more to fight these crimes.

Congress is considering giving law enforcement more tools to crack down on copyright infringement and the sale of counterfeit goods online, but the proposed legislation has run into some opposition.

Earlier this month, the Senate Judiciary Committee unanimously approved a bill that would allow the Justice Department to obtain court orders identifying sites dedicated to "infringing activity" and require companies that register Internet domain names to suspend those accounts. And to reach Web sites registered outside the US, the bill also would require Internet service providers to block their users from accessing those sites and prohibit payment processors and online advertising networks from doing business with them.

The bill, sponsored by Sen. Judiciary Chairman Patrick Leahy, D-Vt., has strong backing from Hollywood, the nation's big record labels and other industries that depend on strong intellectual property protections. But some in the technology industry say it could result in Internet censorship by blocking access to Web sites.

Electronic registration mark

Electronic registration mark is a proposed category of trademark that would restrict the use of trademarked words and phrases in online advertising.
The State of Utah proposed this in response to trademark owners' claims that online advertisers have abused trademarked terms. Some online advertisers, particularly search engines, allow trademarked keywords to generate advertisements for a trademark holder’s competitors. Several corporations have sued search engines to stop this practice, claiming that it violates United States trademark law. In most of these cases, courts have ruled that traditional trademark law, as currently written, does not restrict advertisers’ ability to use trademarked terms to trigger advertisements.
The Utah Trademark Protection Act created the electronic registration mark. Under this now defunct law, trademark holders could have restricted the use of its registered trademarks to generate advertisements for products that compete directly with the trademarked product. The owner of the mark could have sought redress from two parties: The competitor that purchased the advertisement, and the website that displayed the keyword-generated advertisement. This law applied only to internet pages viewed within the State of Utah. The law had instructed the state to create a searchable database of electronic registration marks and to provide access to this database free of charge. This became Utah law in 2007 but was repealed in 2008 before implementation.
No other states have established electronic registration mark laws, and the federal government's trademark law does not clearly address how it applies to online keyword searching. Judges in France have consistently upheld rulings that French trademark law bans the sale of trademarked search terms in keyword advertising for any website viewed from within France.