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On Wednesday, Jon Leibowitz, chairman of the Federal Trade Commission (FTC) called on the U.S. Senate commerce committee to develop laws that guarantee consumer privacy on the web. Leibowitz also requested that congress give the FTC power to enforce privacy laws with civil penalties. Leibowitz argued that strict enforcement would promote Internet commerce by increasing the trust that Americans put in online transactions.

Leibowitz told the Senate committee that “Most consumers are entirely unaware of the vast amounts of data about them being sold and collected about them, both online and offline," adding that the FTC lacks the authority to assess penalties for most transgressions against online privacy. Clear online privacy laws would level the playing field between companies that already had privacy policies and those that lacked them, and thus escape regulatory oversight.

Senator John D. Rockefeller (D. West-Virginia) who heads the senate committee, raised doubts regarding the effectiveness of industry self-regulation on privacy. “Sometimes industry self regulation efforts do not end up protecting consumers,” Mr. Rockefeller said. “In my experience, corporations are unlikely to regulate themselves out of profits.”

So far “self-regulation” has failed to provide consumers with the online protection they need. The FTC recently accused Google, Facebook and Myspace of breaching assurances regarding what consumer information they would keep private and when they would share it with advertisers.

Leibowitz told the Senate committee that he expects that “by the end of the year there’s going to be meaningful Do Not Track for American consumers so they can opt out of third-party advertisements.”

Online behavior tracking is big business today. Web-service providers (such as Google or Amazon), advertisement tracking companies, and data brokers (companies that resell databases of personal information) monitor our clicks, searches and reading habits as we move around the Internet. This information about our online activity is later sold and traded.

A Do Not Track system worthy of consumer’s confidence must provide an opportunity to opt out and limit the data that is collected, how long it is stored, how it is used, and who is allowed to use it. Let’s hope a “meaningful” Do Not Track is not dispelled by industry’s desire for profits. If it is, than meaningful legislation will be necessary to safeguard our privacy online.