• by Wendy Davis , Staff Writer @wendyndavis, November 12, 2010

The Federal Trade Commission and Commerce Department are both expected to issue recommendations soon about online privacy, but appear to be on different pages, according to publishedreports.

While the potential implementation details remain fuzzy, the FTC is expected to recommend that the online ad industry develop a universal "do-not-track" mechanism that will allow people to easily avoid all tracking as they surf the Web. Generally, people who now want to opt out of cookie-based tracking must do so at multiple sites or repeatedly reconfigure their browsers.

Some FTC officials have also made no secret of their views that the industry hasn't done a very good job of regulating itself. By and large, Web companies notify users about online tracking and targeting through privacy policies. But those policies typically are lengthy and dense -- yet also sometimes incomplete and loophole-filled.

For all of its criticism, however, the FTC isn't expected to recommend that new legislation be enacted.

The Commerce Department, meanwhile, appears to be gearing up to propose new laws, The Wall Street Journal reports. Commerce also is expected to recommend the appointment of a federal privacy czar.

At first glance, it would appear that the Commerce report will take a harder line on privacy than the FTC's. After all, many companies at present might voluntarily notify people about online ad targeting and allow them to opt out, but no companies are legally required to do so. Any law that limits online data collection and use, therefore, appears more restrictive than the status quo.

And, indeed, some privacy advocates view the prospect of a pro-regulation report by Commerce as a positive development. Ad industry groups, meanwhile, tend to say that self-regulation will offer more flexibility to the industry than laws.

But not all privacy advocates support the anticipated Commerce report. Jeff Chester, executive director of the Center for Digital Democracy, says that Commerce might propose a law that more or less mimics the Boucher bill -- which he and many other consumer advocates oppose. They argued in May that the measure would give consumers even less protection than at present because it would largely enshrine the current notice-and-choice model while also banning consumers from suing for privacy violations.

Chester adds that the FTC, not Commerce, should take the lead in privacy issues.

Even without new laws, the FTC can still bring enforcement actions against Web companies who mislead consumers about privacy -- such as by failing to honor their privacy policies, or circumventing users' opt-out preferences by, say, using Flash cookies to recreate deleted HTTP cookies.

In fact, back in January consumer protection head David Vladeck said he hoped to announce some enforcement actions by the end of the year against companies that "undermine the tools that consumers can use to opt out of behavioral advertising." Of course, with only six weeks left in the year, it's not certain that he will do so.