A new effort to strengthen privacy protections for online and offline data is underway in Congress. Reps. Rick Boucher, D-Va., and Cliff Stearns, R-Fla., are floating a draft bill that would impose a variety of new requirements on companies that collect data on individuals.

Companies that collect personally identifiable information (PII) would be require to display their privacy policy conspicuously and in clear, understandable language. They would not have to receive consent before collecting information, unless it is sensitive, such as medical, financial, sexual orientation or precise location data. If a company wants to share personally identifiable data with an unaffiliated third party, it has to secure permission, unless it is shared for operational or transactional reasons.

Boucher said the purpose of the bill is to promote electronic commerce by giving users greater confidence in the security of their information.

"Our goal is to encourage greater levels of electronic commerce by providing to Internet users the assurance that their experience online will be more secure. That greater sense of privacy protection will be particularly important in encouraging the trend toward the cloud computing," Boucher said upon releasing the draft legislation.

Mathew Ingram at GigaOm says that the bill's requirements generally reflect the practices of "reputable online companies." He notes, however, that while the legislation has drawn mostly praise from industry, it has sparked rampant opposition from both advertising companies and consumer advocates. Some privacy rights groups have said consumers would be worse off with this legislation than they are today. The opt-out rule, they argue, has been shown not to work.

In a recent study at New York University, a law professor found that not even one user out of 1000 looks at the small print in the terms of service on a website, Andy Greenberg at Forbes reports. Meanwhile, online advertisers are complaining that the opt-in requirement for sensitive information would be overly burdensome.

For more:
- see draft privacy legislation
- see Rep. Rick Boucher's press release
- read Mathew Ingram's post at GigaOm
- read Andy Greenberg's article at Forbes

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