Microsoft, Netscape Pair Up on Net Privacy

WASHINGTON —  Microsoft Corp. announced Wednesday that it is joining archrival Netscape Communications in a plan that would give consumers more control over personal information collected on them on the World Wide Web, while publishing giant McGraw-Hill Cos. unveiled its approach to assuring privacy on the Internet.

The significantly different approaches were unveiled at Federal Trade Commission hearings that are exploring ways to assure privacy in the emerging digital marketplace. Digital marketers are devising reforms in an effort to show that their industry can protect privacy without government regulation. Several bills have been introduced in Congress that would govern Internet privacy.

McGraw-Hill, publisher of BusinessWeek magazine, unveiled procedures that prohibit the sharing of sensitive data collected online from consumers, such as financial information, with outside parties or between divisions of McGraw-Hill. It also allows consumers to decide whether McGraw-Hill can share with outside parties personal information not considered sensitive, such as names and e-mail addresses.

Microsoft joined a previously released plan announced by Netscape and Firefly Networks calling for an “open profiling standard.” The standard addresses and places limits on how Web sites gather personal information from visitors to the sites. Currently, some Web sites require visitors to fill out online registration forms seeking detailed personal data, which is later used to tailor ads or services to them. Open profiling standard would allow consumers to selectively send that information directly from their computers, avoiding the online forms.

David Fester, product manager of Internet Explorer at Microsoft, said the alliance with Netscape and Firefly will ensure that Internet users have complete control over what information they reveal and to whom.

“It’s similar to a warranty card you fill out when you buy a new television,” he said. “You have the option of filling out only certain pieces or not filling it out at all.”

This card, however, will pop up on your computer screen as you open a Web site for the first time.

The agreement between Microsoft and Netscape is a rare instance of cooperation between two companies that are otherwise locked in a fierce fight for software supremacy on the Internet. Netscape’s Navigator is by far the most popular browsing software on the Net, and Microsoft’s Internet Explorer has captured much of the rest of the market.

For that reason, analysts said the accord is a major breakthrough in the effort to establish ground rules for interactions between customers and companies on the Web.

“This is a wonderful thing for the whole industry,” said Josh Bernoff, an analyst at Forrester Research Inc. in Cambridge. “They have put together a standard that makes it easy to identify people but protects privacy. Instead of generic Web sites, you’re going to see a lot more personal service.”

While the Microsoft-Netscape solution calls for development of technological firewalls, McGraw Hill’s plan is a strict corporate procedure.

FTC Commissioner Christine Varney praised McGraw-Hill, saying its approach “made good business sense.

“If everyone did what you are doing, we’d be out of business,” she said.

But several consumer advocates said that McGraw-Hill fell short of offering consumers control and noted that McGraw-Hill will share nonsensitive information with outsiders unless consumers ask it not to do so--a so-called opt-out policy. They said consumers would have more control if McGraw-Hill sought explicit permission to share personal data--an opt-in policy.

“Enlightened self-interest only goes so far,” said Jean Ann Fox of the Consumer Federation of America. “All the plans we’ve looked at have an opt-out policy. I’d rather see opt-in.”

McGraw-Hill, in announcing its privacy policy, noted that commerce on the Internet is unlikely to grow unless strong privacy protections are in place.

“Unless the public feels secure in its use of electronic networks, the potential of this technology as a medium of exchange will never be realized,” McGraw-Hill Chairman and Chief Executive Joseph L. Dionne said at the hearing.

At the conclusion of Wednesday’s session, Commissioner Roscoe B. Starek III said the industry seems to be moving to a point where visitors would eventually be asked to purchase privacy from Web sites.

“The way I see it coming down,” he said, “Web sites are going to give consumers a choice: provide information or pay for it.”

Gellene reported from Washington and Miller reported from Los Angeles.