Companies defend their online privacy protections

A host of major American companies that operate websites have defended their online privacy practices in letters to Congress, saying their consumer protections are robust while asserting that some collection of information is essential to their business model.

"In order to continue to provide our audience of over 20 million users with free content, we are required to run advertising," John Morse, president and publisher of the Merriam-Webster dictionary, wrote to Rep. Ed Markey, D-Mass., and House Energy and Commerce ranking member Rep. Joe Barton, R-Texas, co-chairmen of the House Bipartisan Privacy Caucus.

"Advertisers that run advertisements on our sites, and most major sites, require some targeting capabilities which are achieved through cookies and other devices," said Morse, whose letter was released with those of other business executives by the lawmakers Friday.

Internet tracking devices known as cookies and beacons have become a source of concern for privacy advocates and lawmakers seeking to protect consumers online and shed light on the practice of behavioral marketing.

In August, Markey and Barton requested information about data-collection practices from the 15 websites identified by the Wall Street Journal's "What They Know" series as installing the most tracking technology on visitors' computers. The letters released Friday are in response to this query.

In addition to Merriam-Webster, About.com, AOL, AT&T, CareerBuilder.com, Comcast, Microsoft, MySpace.com , Photobucket.com, Verizon Wireless and Yahoo sent letters to Markey and Barton.

"It is technically impossible for Yahoo to be aware of all software or files that may be installed on a user's computer when they visit our site," Anne Toth, Yahoo 's vice president of global policy and head of privacy, said in her letter.

All of the companies posited that they are responsible stewards of users' information claiming clear and up-to-date privacy policies.

But the response did not assuage the lawmakers' concerns.

"The responses raise a number of concerns, including whether consumers are able to effectively shield their personal Internet habits and private information from the prying eyes of online data gatherers," Markey said.

It is now too hard for Internet users to identify all the parties that may be collecting their information, "keeping consumers in the dark," he added.

Barton expressed concern that many Americans may be unaware of the information being collected about them and others "who seek out information in privacy policies often come up against complicated legalese."

More transparency and clarity is needed, he said.

At an event Friday about protecting children's privacy online, FTC Chairman Jon Leibowitz said that companies need to step up their efforts to protect users or Congress will feel the need to be "more prescriptive" with regulations.

Leibowitz unveiled a new community outreach kit featuring Net Cetera, a guide to speaking with children about online security, a pamphlet for kids and a short video, among other resources.

The premise of Net Cetera, Leibowitz noted, is to have "adults help kids navigate cyber space."

That won't happen because adults are more tech savvy, because they're not, he quipped. But adults can pass along the importance of protecting one's reputation, he said.

"Seizing the opportunity of broadband requires that we confront the issue of privacy," said FCC Chairman Julius Genachowski, who also appeared at the event. Both agencies are actively working to bolster their resources and regulations related to online privacy.

With Congress expected to see the introduction of comprehensive online privacy legislation after it convenes in January, lawmakers and federal agencies appear to be setting the stage for the upcoming debate.