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April 4, 2000
Law, Taxes, Money

High-profile FTC investigations may affect nonprofits

By Daniel Pearson

FTC The fight is only in the middle rounds, but it looks like Big Brother could be knocked out by big government, with nonprofit organizations inadvertently taking one on the chin.

A study released by international research company Jupiter Communications says 64 percent of Internet users do not trust Web sites to keep information regarding their browsing habits confidential, even if the site has a posted privacy policy.

"There is a general nervousness about giving credit card information over the Internet," Jupiter analyst Michael Slack told the Privacy Times. "Sites need to actively promote their efforts among consumers to start pushing back their fears."

That may become much harder than it sounds in the near future, thanks to two high profile Federal Trade Commission investigations into popular retail Web site Amazon.com and Web portal Yahoo!

Seattle-based Amazon, the Web's largest retailer, is being investigated for the method one of its software divisions, Alexa Internet, uses to collect customer information. Santa Clara, Calif.-based Yahoo! is under investigation for not informing its users information is being collected. Yahoo! allegedly sent data from users who took a personal health test to a server at HealthCentral.com.

The large-scale exposure of both cases could be disastrous for nonprofit agencies that use the Internet to trade and purchase information on potential donors.

"That's a practice that is really just beginning to take off," said Michael Hamill, vice president of public policy communications for the Independent Sector.

Torricelli Further fueling the fire is Sen. Robert Torricelli (R-NJ), who introduced Senate Bill 2063, otherwise known as the Secure Online Communication Enforcement Act of 2000. The bill would require Web sites to post a link allowing Internet users to either opt-in or opt-out of a company's information gathering practices.

Torricelli posted a statement on his Web site this week further detailing his feelings on Internet privacy. While he addresses many issues that seem relevant to the average consumer, neither he nor the bill itself addresses how such legislation would affect the nonprofits and charitable giving.

His statement said not all information gathering is harmful -- for example, people might appreciate companies knowing what types of products or news stories interest them -- but strong legislative and regulatory protections are needed to ensure a surfer's privacy.

"Imagine walking downtown or in a local mall and having someone record every store you enter and every item you look at, even if you choose not to buy it," Torricelli wrote. "If this were to happen, most Americans would be outraged that their most basic right were being violated."

Comments were not available from Torricelli at press time because the senator requires a formal, written request from members of the press before answering any questions. PNN sent the request Friday afternoon and expects to hear from Torricelli early this week.

Another study on this issue released by NFO Interactive, a Greenwich, Conn. firm, found most people would not make transactions of any kind online because they are uncertain how their personal information would be shared or used.

Daniel Pearson can be reached at
danielpearson@mindspring.com



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