Yesterday, the Senate Commerce Committee held a hearing about online behavior advertising. In an unusual reversal of typical positions, the witnesses representing Internet firms called for government regulation of online privacy and the witness from the FTC said they are “…cautiously optimistic that the privacy issues raised by online behavioral advertising can be effectively addressed through meaningful, enforceable self regulation.”

I’m left scratching my head as to why Internet firms would advocate for government regulation. For the record, Shop.org and its parent organization, the National Retail Federation, agree with the FTC that online privacy issues can be addressed through self regulation efforts of companies who understand that it is in their best interest to respect their customers’ privacy. In fact, there are many retailers who view their efforts to respect customers’ privacy as a competitive advantage.

Kudos to Sen. Jim DeMint (R., S.C.), who offered the visionary insight recognizing that technology changes at a far faster pace than the government can make laws. “It’s very likely by the time the FTC acts that the industry will be far ahead of where you are,” he said.

No doubt, Shop.org and NRF will continue to monitor this issue closely. It is far from over. More hearings are scheduled in the Senate and a hearing is scheduled in the House next week that will focus on the Google-DoubleClick merger and the possible acquisition of Yahoo! by Microsoft - ripe topics for more online privacy questions.

UPDATE:  If you’d like to read the opening remarks of the witnesses and Senators at the hearing or listen to a recording of the hearing, it’s all available at the Commerce Committee’s Web site.