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In our periodic look at what’s happening on a regulatory level, two bills are currently working their way through Congress that could potentially affect webmasters and online marketers…making yourself aware of any new requirements is important for effectively managing a small business online.

Ignorance of the law is no excuse for the authorities so it’s important we’re all on guard so we don’t find ourselves in any trouble.

Privacy bill could mean increased disclosure requirements, privacy protections

One idea floating around Congress that’s seeing traction is an Internet consumer privacy bill being proposed by Rep. Rick Boucher (D-VA), chair of the House Energy & Commerce Subcommittee on Communications, Technology & the Internet.

Rep. Boucher’s bill is more of a privacy bill for consumers. Its main target is online advertisers who target consumers through behavioral advertising. Many online advertisers – including Facebook with their new ‘like’ features – examine behavior patterns online to target advertising to relevant parties, which in turn increases conversions.

Behavioral technology tracks a user’s searches, how long the stay on a page and even the sites they visit. Data is then taken by advertisers to establish behavior patterns and online demographics.

Web advertisers fear this bill will require web users to opt-in, causing them to lose an important tool in how they target potential customers. However, Rep. Boucher says he supports an opt-out option where web users can choose whether they want their information shared or not.

“If I were [a publisher or advertiser], I would want Internet users to have a sense that their experience is more secure, that they know what information is collected about them, and they be given much more control. They will be more trusting of electronic commerce. . . .it’s good for business,” says the representative from Virginia.

Whatever happens, there will certainly be increased regulation like new disclosure requirements and legal forms indicating how a site tracks data and uses it.

Financial Reform Bill grants new powers to FTC

Tucked inside the financial reform bill passed by the House last November was a provision expanding the Federal Trade Commission’s powers to allow them to impose civil penalties on companies engaging in “unfair” or “deceptive” trade practices.

Since the mid-1970’s, the agency had to hear public testimony and a congressional review had to occur before any penalties could be imposed on the business. With this new power, the agency will basically decide for itself with no public scrutiny what constitutes unfair advertising practices.

Ad industry groups fear this could lead to the FTC acting as an “unelected legislature,” basically giving it free rein over regulating Internet commerce.

The financial reform bill is currently being debated between the two chambers. The House passed its version late last year and the Senate this past April. Both chambers are reconciling their differences, which will need to pass. President Obama has indicated he will sign the bill when it arrives on his desk.

This bill seems more dangerous than Rep. Boucher’s privacy bill since it directly expands an agency’s enforcement authority.

Appointees to the FTC are chosen by the President so vesting this much authority in a centralized executive authority could be dangerous from a checks and balances perspective.

Boucher’s privacy bill is understandable in a big way but it will certainly add new requirements for webmasters and SEO marketers. The combination of the two could be a double whammy for any of us marketing our businesses online.

Stay tuned…