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WASHINGTON, D.C. -- Congress shouldn't rush to impose costly privacy regulations on Internet companies before the private sector gets a chance to satisfy consumers' privacy concerns on its own, according to a panel of conservative public policy scholars.

The recent discussion was hosted by the Progress & Freedom Foundation, drawing a representative from the Federal Trade Commission.

"I believe the private sector is far more capable for solving [privacy] problems and can probably do a far better job" than government, says Orson Swindle, an FTC commissioner. "The industry is paying attention and they're doing things about it."

Swindle says he disagreed with the FTC's decision last year recommending Congress take action to protect privacy online. In the two previous years, the commission had recommended against government intervention.

Regulations could impose staggering costs on businesses while bringing only questionable benefits, Swindle says. Rather, he believes government should limit its role to enforcing existing privacy laws, such as those against fraud and identity theft.

Concurring on Caution

Other panel members have similar views, saying Congress should proceed cautiously.

"There is little evidence that consumers are being harmed by the misuse of commercial information," says Paul Rubin, professor of economics and law at Emory University.

Most information gathered online, through hidden software such as "cookies" or "Web bugs," actually benefits consumers, Rubin says. They help sites tailor their interaction by reducing junk e-mails or weeding out undesired electronic messages.

But at another forum last week, Frank Torres of the Consumers Union declared self-regulation by business "a failure."

Consumer groups have urged the government to protect consumers with privacy laws that promote fair information practices.

The panel's conclusions at the Progress & Freedom Foundation event suggest an "orchestrated campaign" aimed at "deflecting serious inquiry into privacy violations in the private sector," according to Edmund Mierzwinski, consumer program director at the U.S. Public Interest Research Group.

"I'm disappointed they've adopted this strategy," Mierzwinski says. "No good solutions have been coming out of the private sector for years." He contends that businesses "simply want time to establish privacy-invasive modes of business that will then be more difficult to regulate once they are established."

Legislation Languishes

Although privacy concerns have become more pressing among lawmakers and the public, virtually no legislation has passed in any state, says Emily Hackett, state policy director for the Internet Alliance. Only Montana has enacted a law compelling its agencies to post privacy statements on their Web sites.

Privacy legislation hasn't met with much success in Washington, D.C., for a handful of reasons, says Thomas B. Pahl, a staff member of the Senate Judiciary Committee. With so many bills introduced and little sign from President Bush on how he leans, legislators are finding it difficult to build support for a specific measure, Pahl says.

And because of the slumping economy, legislators are hesitant to impose burdens on a technology sector already in the midst of "tough financial straits," Pahl adds. Such legislation would bring "intangible benefits" but impose "tangible costs," he says.

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