The Federal Trade Commission (FTC) has proposed the creation of a Do Not Track system preventing websites from collecting unauthorized personal data.
It believes it should be easier for consumers to opt out of behavioral tracking, in a similar manner to the Do Not Call telephone system. The report also calls for greater disclosure from website owners about what user information is being gathered and how it is stored and used.
Chairman Jon Leibowitz said the FTC now recognized that self-regulation - the basis for privacy principles adopted back in 2007 - had failed to work.
The recommendations were approved unanimously by the five-person commission, which is taking comments until the end of January. The House Subcommittee on Commerce, Trade, and Consumer Protection will discuss Do Not Track in more detail at a hearing today.
Privacy campaigners have welcomed the move.
"The FTC's new privacy report is a promising development in the evolution of online consumer privacy," the Electronic Frontier Foundation says in a statement.
"With the publication of the privacy report, it seems that the FTC is ready to tackle some of the most challenging issues of online consumer privacy - including revolutionary approaches to defending personal privacy such as Do Not Track."
The Center for Democracy and Technology (CDT) said the recommendations would bolster efforts to enact a privacy bill next Congress.
"The FTC report hits all the right notes. It sets out a modern and forward-looking framework for privacy protection that moves beyond a narrow focus on notice and choice toward a full set of fair information practices and accountability measures," said CDT president Leslie Harris. "The FTC has provided the blueprint. Now it is time for Congress and industry to follow suit."