The Federal Trade Commission this morning released its final Commission Privacy Report, emphasizing the need for a “do not track” mechanism to protect consumers from unauthorized collection of their personal information and more laws to protect consumer privacy. The report will give hyperlocal advertisers, publishers, and location based services some insight on the direction policy makers will take in 2012 regarding consumer privacy.

At a press conference this morning in Washington, D.C., Chairman John Leibowitz said that the report emphasizes three primary principles:

1. Business should incorporate privacy by design in their products.

2. Consumers and  businesses should have a simpler set of choices on how their personal information can be used, including the implementation of a “Do Not Track” mechanism that applies across all platforms.

3.  Businesses should give consumers better explanations on how information is used. The report emphasizes that notices should be clearer, shorter, and more standardized.

The intent of the report is “not to erect a stop light, but to look at the traffic pattern,”  Leibowitz said. When it comes to collecting consumer information, “consumers should have that choice and consumers should have that control.”

Chairman Leibowitz said the FTC will work with industry such as makers of browsers, the Digital Advertising Alliance and the World Wide Web Consortium to implement a workable “do not track mechanism” that will enable consumers to permit or deny data collection from their use of computing and mobile devices.

Chairman Leibowitz said that if the industry and policy maker do not have an acceptable and industry-wide “do not track” system in place by the end of the year, legislation requiring such do not track mechanism is likely. The FTC is scheduling a workshop on May 20, 2012 to review best practices for mobile advertising disclosures.

Regarding data brokers, the FTC will support legislation that would give consumers access to information held by such data brokers. The FTC contemplates in its report the creation of a centralized web site where data brokers can identify themselves to consumers and provide consumers with information on the choices they have with their data.

“The computer is the consumer’s property, and they have a right to what is put or taken from their computer,” said Chairman Leibowitz.

Brian Dengler is an attorney with Vorys Legal Counsel and journalist who covers legal issues in eMedia. He is a former vice-president of AOL, Inc., a former newspaperman, and an EMMY-winning TV journalist. He teaches new media issues as an adjunct at Kent State University and formerly at Otterbein University.