WASHINGTON — Reversing a Clinton administration policy, the new head of the Federal Trade Commission is withdrawing the agency's call for tougher new privacy laws and instead focusing on increasing the enforcement of existing rules and boosting education efforts.
Under the initiative--to be formally announced Thursday by FTC Chairman Timothy J. Muris--the agency plans to increase staffing for privacy-related programs by nearly 50% and reallocate funding from other programs to combat identity theft and educate consumers about how they can safeguard their privacy, according to sources familiar with the plan.
The new policy will substantially darken the prospects for more than a dozen online privacy bills currently pending on Capitol Hill, though the Sept. 11 terrorist attacks already had put those bills on a back burner as Congress focuses on more-pressing issues.
FTC officials declined to comment Monday, saying details about staffing and funding levels under the new policy would be unveiled in a speech by Muris to business and privacy leaders in Cleveland. The agency has about 1,049 employees and a 2001 budget of $147 million.
Muris, a Bush appointee and a frequent critic of government regulation, spent nearly four months studying the privacy issue, meeting with consumer groups, business leaders and academics.
The chairman concluded that new laws would provide little benefit to consumers and would place costly burdens on businesses, according to sources close to Muris.
Instead, Muris will emphasize industry self-regulation and stronger enforcement of existing laws and regulations that protect consumer privacy and prohibit unfair or deceptive practices. That will include an increase in FTC enforcement actions taken against Web sites and other companies that fail to live up to their privacy policies, according to a source at the FTC.
Though the commission has used the threat of lawsuits and regulatory action to get the private sector to improve privacy protections, the agency's enforcement record on privacy has been relatively thin. In the past, FTC officials argued that they lacked the necessary legal authority to crack down on abuses.
The FTC's best-known enforcement action came against the now-defunct Web retailer Toysmart, which attempted to sell its customer information after filing for bankruptcy, even though it had promised to keep the data private. The company eventually agreed to destroy the database.
