The White House wants a law spelling out how personal data can be used. | AP Photos Obama unveils online privacy plan

The Obama administration is taking a two-pronged approach to online privacy, calling on Congress to pass a "consumer privacy bill of rights," while putting the onus on companies like Google and Facebook, as well as privacy watchdogs and online advertisers, to forge new data handling rules for the digital age.

The highly anticipated report released Thursday reflects the White House’s support for a new law that would spell out how consumers' personal information can be collected, stored, used and shared by the Web’s myriad of entities — some of which have found themselves in Washington's crosshairs recently for mishandling their users' data.


But the administration puts at least as much emphasis on its proposal for Internet companies to lead the way on codes of conduct that would draw greatly from the rights and protections the White House wants to codify — rules that, even if lawmakers don’t act, could still be enforced by federal regulators.

“American consumers can’t wait any longer for clear rules of the road that ensure their personal information is safe online,” President Barack Obama said in a statement announcing the release of the report. “As the Internet evolves, consumer trust is essential for the continued growth of the digital economy."

"That’s why an online privacy bill of rights is so important," Obama said. "For businesses to succeed online, consumers must feel secure. By following this blueprint, companies, consumer advocates and policymakers can help protect consumers and ensure the Internet remains a platform for innovation and economic growth.”

The official release of the administration's new privacy framework, at an event with government officials and industry leaders on Thursday, will cap more than a year of work by multiple federal agencies to try to devise new online privacy rules that balance the concerns of privacy watchdogs with the commercial needs of the tech and advertising communities.

As part of the rollout, the administration is touting a new voluntary commitment by the Digital Advertising Alliance, a collection of the Internet's largest advertisers.

The DAA is the pilot of the Advertising Option Icon, which alerts Web users of ads that are tied to their interests or the websites they visit. The coalition’s members offer a feature that helps users opt out of seeing those ads. On Thursday, the DAA is announcing, in conjunction with the administration report, that it will work with Internet browser companies, and permit the use of browser-based “Do Not Track” tools that allow consumers to control Web tracking and advertisements based on their browsing habits.

“The administration, Congress and the FTC have been pushing the business community for several years to make sure consumers are aware of the information practices occurring online and providing choice to consumers regarding the collection and use of information about them,” Stu Ingis, DAA’s general counsel, said in a statement. “The DAA is an embodiment of leading companies responding to this call.”

However, Ingis told reporters it could be months before the tools are available to users.

For its part, the White House’s proposed “bill of rights” calls on companies to give consumers clear controls over whether their data is collected, and understandable explanations about how their data is used. The report specifies that Web users should have a right to "access and correct" personal information collected by companies in some cases, and it charges Web firms to collect only as much data as they need and to secure it.

The White House's principles further call on companies to respect the original “context” in which they obtained that data. For those companies that seek to use consumers’ personal information in new ways, the bill of rights would call on them to provide more transparency, control and choice to consumers. And the principles stress the importance of enforcement when companies run astray of the rules.

Ultimately, it would be up to Congress to translate those principles into law — a goal that has long eluded lawmakers, even amid a slew of privacy flaps involving companies like Google and Facebook in recent months.

But even if the bill of rights legislation never reached the president's desk, it would still guide the administration's work in facilitating industry self-regulation, under the watch of federal regulators.

The system itself would be voluntary. The administration envisions that companies like Google and Facebook, as well as the networks that advertise to consumers based on their Web browsing behaviors, would come together with privacy hawks and other stakeholders to develop codes of conduct that keep in line with the administration's privacy principles.

Once they commit to following those rules, the FTC would keep watch over them — ensuring they meet their promises, or else face harsh punishments. Administration officials told reporters on a Wednesday conference call previewing the report that they are confident companies will buy into the self-regulatory system.

Noting the "broad participation" of industry leaders and privacy hawks alike, White House Deputy Chief Technology Officer Danny Weitzner said officials have "every reason to be encourage there will be participation going forward."

He said the key, however, is to ensure a full array of voices — from privacy hawks, to academics, to companies and government officials — are at the table "so we can have the benefit of the best" thinking.

Work with those stakeholders on online privacy began in April 2010 by the Internet Policy Task Force, led by the Commerce Department, to craft draft recommendations for the future of privacy regulation. Officials put forward a so-called green paper in December 2010, before soliciting comments from companies and privacy hawks. At the same time, the FTC prepared its own draft report on privacy regulation and enforcement. The FTC is expected to unveil its final report within the next few weeks.

This article first appeared on POLITICO Pro at 12:01 a.m. on February 23, 2012.