In a long anticipated report entitled Protecting Consumer Privacy in an Era of Rapid Change, a divided U.S. Federal Trade Commission focused on raising consumer awareness and soliciting industry feedback on online tracking and behavioral advertising. Industry is portrayed as “too slow” to improve privacy practices in this arena. The report proposes a normative framework for how companies should protect consumer privacy, which is designed to serve “as a policy vehicle for approaching privacy.”

While the report solicits industry feedback on its proposed recommendations, the subtext certainly suggests the self-regulatory approach is not likely to satisfy this Commission in the long run.

A majority of Commissioners recommended a browser-based “do not track” option to afford users broad and granular control of how they are tracked. The Commission promises to seek a legislative fix if self-regulation and industry technical advances do not voluntarily and quickly roll out such controls. The framework further recommends that privacy disclosures should be simplified and streamlined, and that privacy considerations should be factored in at the earliest stages of product design and development

The report is preliminary and plainly just a starting point for what is likely to be an extended discussion among industry players, consumer groups, various constituent agencies and departments in the Executive branch and on the Hill. Notably, both Commissioners Kovacic and Rosch issued concurring statements expressing substantial reservations with some of its core conclusions. This FTC report — together with another expected to be issued by the Department of Commerce shortly — suggest some compliance ideas for 2011. Look for a post on that after the Commerce report is issued.