House Energy and Commerce Consumer Protection Subcommittee Chairman Cliff Stearns (R-Fla.) has enlisted 19 co-sponsors for a bill he outlined in October, which would set minimum privacy standards for businesses.

"Congress needs to address the American people's concern with the online and offline collection and use of personal information," Stearns said in a statement.

The legislation would require companies to provide "notice" of their privacy practices, as well as a description of how information is collected.

The bill also would preempt tougher state privacy laws, and would allow consumers to remove their personal information from customer marketing lists often traded or sold to other companies.

In addition, the measure would toughen existing laws on identity theft and prohibit the sale of Social Security numbers and would give sole enforcement authority to the Federal Trade Commission.

The legislation also would grant companies "safe harbor" from civil lawsuits for privacy violations, provided they join an FTC-approved self-regulatory agency - such as Truste or BBBOnline - that meets the federal baseline privacy principles.

Stearns has removed a controversial provision that would have barred U.S. authorities from enforcing European privacy laws, said sources familiar with the bill.

But privacy groups say the bill does not go far enough to protect consumers' most private information, such as health and financial data.

"It seems as though this bill does not address some of the major concerns that most Americans have about privacy," said Ari Schwartz, a policy analyst with the Center for Democracy and Technology.

In that regard, the Stearns bill contrasts with legislation introduced last month by Senate Commerce Committee Chairman Ernest "Fritz" Hollings (D-S.C.), which would require Internet businesses to obtain consumers' consent before collecting or sharing their "sensitive" personal information. Such data might include financial and medical information, or religious or political affiliation.

Stearns' measure leaves the protection of consumers' medical and financial information to privacy provisions in laws already on the books, such as the Gramm-Leach-Bliley financial services modernization law and the Health Insurance Portability and Accountability Act.

Critics say the bill's reliance on existing enforcement laws is hypocritical, given that opponents of more restrictive measures have derided Gramm-Leach-Bliley as a hastily crafted, ill-conceived vehicle for protecting consumer privacy.

That law gave consumers the right to opt out of having their financial information shared with affiliates and marketers. While the opt-out notices that banks mailed to consumers this summer cost millions of dollars to process, most were so complicated that consumers simply threw them away unread, critics said.

Chris Hoofnagle, legislative counsel for the Electronic Privacy Information Center, said the Stearns bill would offer consumers little protection without a right-of-private action against companies that violate their own privacy policies. That right is guaranteed in the Hollings bill.

"This is an awful proposal that gives consumers nothing," Hoofnagle said of the Stearns proposal. "I challenge anyone to find something that this bill would remedy."

U.S. Chamber of Commerce spokesman Joe Rubin said the legislation was a welcome contrast to the Hollings bill. But he also questioned the need for additional privacy regulations.

"It's certainly a more thoughtful approach than the Hollings bill, but we still have some questions about whether privacy legislation is even necessary," he said.

Reported by Washtech.com, http://www.washtech.com .

11:33 CST