Rep. Rick Boucher (D-Va.) said he is working with Rep. Cliff Stearns (R-Fla.) and Rep. Joe Barton (R-Texas), to craft a bill to require online companies to notify consumers of tracking activity. All three congressmen are members of the Internet subcommittee in the House Energy and Commerce Committee, which Boucher chairs.

A Recycled Proposal

Boucher and his staff weren't available for comment on Friday. However, Boucher told CNET last month that the model for his bill is likely to be the Consumer Privacy Protection Act. The CPPA was first proposed in 2002, but was not adopted.

"I think if we empower (Internet) users in this way," Boucher said, "it would lead to greater consumer confidence, leading to more electronic commerce."

Among other things, the CPPA provided that "upon the first instance of collection from the consumer of personally identifiable information, that may be used for a purpose unrelated to the transaction, by a data-collection organization, the organization shall provide the notice at the time personally identifiable information is collected."

The bill also required data-collection agencies to give consumers an opportunity to opt out of the sale or disclosure of personal information, and imposed a requirement for the drafting and implementation of an "information security policy" to protect confidential information.

Self-Regulation Inadequate?

The issue of behavioral targeting of advertisements has become an increasingly hot issue in Washington. Just last month, the online advertising industry dodged a bullet when the Federal Trade Commission concluded that companies were capable of regulating themselves and held off imposing restrictions on data collection. But Boucher questioned whether that was the right decision.

The FTC's action was praised by major online ad providers like Google and Yahoo, but critics questioned how effective the agency's approach would be.

"I think self-regulation is helpful, and responsible Web sites will abide by (the principles)," he told CNET, "but self-regulation is not sufficient, in my opinion."

Jeff Chester, a longtime privacy advocate and executive director of the Center for Digital Democracy (CDD), agreed. "I see this document as the last official act of the Bush administration," Chester told CNET.

In a CDD blog posting Thursday, Chester expressed his frustration with Google's push to implement behavioral targeting of ads. "While it is entirely to be expected that as the world's largest online ad company, Google would fully embrace behavioral targeting," Chester wrote, "it's also unfortunate. Eventually -- and we hope soon -- responsible shareholders, such as socially conscious investment funds, and global regulators will hold Google -- and other online marketers -- more accountable to the public."

Congress may beat them to it.