The Commerce Department on Thursday released a green paper, Commercial Data Privacy and Innovation in the Internet Economy: a Dynamic Policy Framework, recommending the consideration of a new framework to address online privacy issues in the U.S.  The goal of the 88 page report, created by the department’s Internet Policy Task Force, is to improve consumer online privacy protection while continuing to foster online business growth.

One of the key recommendations of the report calls for the creation of a set of “Fair Information Privacy Principles”, a sort of privacy Bill of Rights for the online consumer.  These principles would act as a baseline for online data privacy protection, and make usage of online consumer data much more transparent.  The goal would be to establish clearer online data usage limits and enhanced audit requirements, with policy violations enforceable by the Federal Trade Commission.

In addition, the report recommends the creation of a Privacy Policy Office in the Department of Commerce. The role of the new office would be to, among other tasks, work with the FTC, examine commercial uses of online data, and determine where gaps in privacy protection existed.

The report also recommends the enactment of a federal data security breach notification law. The report goes on to add, “A comprehensive national approach to commercial data breach would provide clarity to individuals regarding the protection of their information throughout the United States, streamlining industry compliance, and allow businesses to develop a strong nationwide data management strategy.”

The Commerce Department seeks public comment on the report by January 28, 2011, with a white paper on the subject planned for release in 2011.