WASHINGTON (Reuters) - A key senator introduced legislation on Wednesday that would require Web sites to disclose what they do with personal data collected from visitors, a sign of Congress's growing interest in establishing new consumer protections for the digital era.
The bill, introduced by Commerce Committee Chairman John McCain (news - web sites), would not prohibit Web sites from using visitors' personal data for marketing purposes, but it would require them to tell Web surfers what steps they may take to limit that use.
``Clearly, business should inform consumers in a forthcoming manner how they treat personal information and give consumers meaningful choices as to how that information is used,'' the Arizona Republican said.
Joining McCain in sponsoring the bill were Senators Spencer Abraham, a Michigan Republican, and Democrats John Kerry of Massachusetts and Barbara Boxer of California.
Many Web sites require visitors to submit information such as name, age and zip code in order to use their sites; others track visitors' actions using a technology called ``cookies.''
The Federal Trade Commission issued a report in May concluding legislation was needed to bolster privacy protections although Congress and the White House at the time said they preferred to give voluntary industry efforts more time.
But the lack of an enforceable industry standard, highlighted by the recent attempt of bankrupt retailer Toysmart.com Inc. to sell a consumer database, has renewed interest in federal oversight.
Lawmakers in both chambers of Congress have introduced legislation to prevent other companies from emulating Toysmart.
Kerry said industry attempts at self-regulation have not proven sufficient, and government legislation is necessary to ensure continued growth of the Internet.
``Self-regulation will have a continued role to play, but it has not been enough,'' he said.
The bill would enable consumers to sue Web sites who violate the bill's agreements to sue for up to $22,000. It also would call on the National Academy of Sciences to conduct an 18-month study to determine if similar protections are needed for customers of offline, ``bricks and mortar'' businesses.
McCain said that the Commerce Committee, which he chairs, will hold hearings on the issue and pass the bill on to the Senate for a full vote in September.
Last Friday, the Federal Trade Commission reached an agreement with Toysmart that would allow the failed dot-com to sell its customer list to a similar company that was prepared to honor its earlier privacy commitment.