"We do not believe that specific privacy enhancing technologies or processes should be mandated by law," Microsoft wrote in comments filed with the Commerce Department. "Incentives and encouragement to do so should be encouraged through flexible guidelines and standards."
The Network Advertising Initiative, a coalition of the largest online ad networks, told the Commerce Department, "existing legal regimes and self-regulatory approaches strike an appropriate balance between privacy and innovation with respect to the collection and use of information for online advertising."
And Facebook advised "great caution before pursuing a more interventionist government role."
"If social-networking sites take steps that users oppose, they will lose users and suffer in the highly vocal Internet court of public opinion," Facebook wrote in its Commerce Department filing.
Facebook's privacy policies drew scrutiny from Congress following a Wall Street Journal report that revealed the social networking website allowed third-party applications to collect and share personally identifiable information of users and their friends.
Texas congressman Joe Barton, who hopes to lead the powerful Energy & Commerce Committee when Republicans take charge of the House next year, has said he wants to grill Facebook CEO Mark Zuckerberg at a hearing early next year.
As for the Obama administration's moves, Barton says, "Better late than never."
"Neither the government nor the industry are doing enough to protect people's privacy," he said in a prepared statement. "But the Department of Commerce's decision to step up may shine some light on practices that seem to thrive in the dark. I am glad more and more folks -- in the government and otherwise -- are beginning to realize that there is a war against privacy."
What Congress might do about it remains up in the air. The author of one privacy rights bill, Rep. Rick Boucher, D-Va., lost his bid for re-election. But Barton, who co-chairs the bipartisan Congressional Privacy Caucus, said in a recent C-SPAN interview that a privacy rights bill "is certainly something we can work with our friends on the Democratic side on a bipartisan basis."
"I think privacy is one of those issues that is gaining in importance," he said. "And is something that certainly could be addressed if we can get the right coalition."