Online retail & the midterm elections

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All eyes are on the mid-term election results, with voters finally headed to the polls tomorrow. This election will have some impact on the direction of policy discussions that affect online retail — particularly in the area of privacy and online advertising. While hearings and legislative proposals are expected again in the 112th Congress, the expected Republican majority in the House likely means these issues will not be at the top of the priority list for House committees for some time. Before you breathe a collective sigh of relief, Congress is not the only game in town, and, at the continued behest of the consumer groups, the Executive Branch is looking closely at online privacy and marketing. In fact we, expect activity from the Federal Trade Commission in the coming weeks, maybe even days.

As you may recall, in June, The FTC attempted to get broad new enforcement authority as part of the Dodd-Frank financial reform bill. That proposal would have given the Commission the right to engage in comprehensive rule-making in key areas, including privacy and Internet marketing. NRF and Shop.org were among the trade associations that objected to the changes, and the Senate declined to accept the controversial provisions during the House-Senate conference committee in late June. Following that setback, the FTC has retooled its focus and announced at the 32nd International Conference of Data Protection and Privacy Commissioners in Jerusalem last week that the Commission intends to move forward with the publication of a report on the “Future of Privacy.” The report is expected to include several key (and potentially controversial) recommendations for the business community. The report is expected to be made public before Thanksgiving, but insiders say it could come as soon as this week.

The keynote address at the same conference was delivered by Assistant Secretary of Commerce for Communications and Information Lawrence E. Strickling. In his speech, Secretary Strickling spoke about the Commerce Department’s ongoing Internet Policy Task Force initiative and announced the Commerce Department’s plan to develop comprehensive Fair Information Practice Principles (“FIPPs”) specifically designed to address privacy protection on the Internet. The Commerce plan would also include the creation of a Privacy Policy Office to serve as a center of information privacy expertise. According to Strickling, the new office would complement the FTC’s role in protecting consumers in this area. Finally, The Obama administration has also formed an inter-agency subcommittee to advise the White House on regulatory and legislative issues for the Web. The panel will focus on the Internet privacy, and will include members from the FTC, Commerce Department, Justice Department, Homeland Security and State Departments. Cameron Kerry, General Counsel at the Commerce Department, and Christopher Schroeder, Assistant Attorney General at the Justice Department, will chair the inter-agency subcommittee.

So, keep your TVs tuned to cable news for what should be interesting and probably even historic election results tomorrow night. But for the time being, the policy debates most likely to affect online retail will take place in the offices of powerful Washington regulators. With the FTC report due to be released this month, one has to notice that it will be happening just in time for the Holidays, when record numbers of consumers are expected to shop online.

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