The FTC has proposed a new online privacy tool that would prevent marketers from tracking web users' browser activity if they choose to 'opt out' from this action.

Federal regulators are proposing to create a “Do Not Track” tool for enhancing online privacy, so that people could prevent marketers from tracking their web browsing habits and other online behavior in order to deliver targeted advertising.

The proposal, inspired by the government’s existing “Do Not Call” registry for telemarketers, is one of a series of recommendations outlined in a privacy report released Dec. 1 by the Federal Trade Commission. The report lays out a broad framework for protecting consumer privacy both online and offline as personal data collection becomes ubiquitous—often without consumer knowledge.

The FTC hopes its report will help guide the marketing industry as it develops self-regulatory principles to define acceptable corporate behavior and inform lawmakers and other policy makers as they draft new rules of the road to protect online privacy. The FTC has limited authority to write those rules itself, so new regulations likely would require congressional action.

Protecting online privacy, the agency says, is critical as more marketers are analyzing the websites consumers visit, the online links they click, their internet searches, their online and offline purchases, the physical locations of cell phones and other wireless devices, and all sorts of personal information disclosed on social networking sites.

So far, FTC Chairman Jon Leibowitz said, the marketing industry has not done nearly enough to ensure that consumers understand what personal information is being collected about them or to give them adequate control over that data collection.

The agency envisions a Do Not Track tool as one important way to let consumers decline, or “opt out” of, much of the tracking that occurs online—a practice the industry calls behavioral, or targeted, advertising. The tool most likely would take the form of a browser setting that would apply across the board as consumers jump from site to site. It would clearly inform sites when tracking and targeted advertising are off limits for a particular browser.