Last Wednesday Trust-e, an industry-sponsored Internet privacy certification group, announced that FreeIpods.com and other Gratis websites had lost the right to display the Trust-e seal. Trust-e said it must keep confidential exactly what FreeiPods had done, but did say that the problems involved children's privacy and material changes Gratis made in its use of the personal information it collects without proper notice to customers.

By Friday, however, Trust-e had changed its tune somewhat, saying that Gratis had "agreed to finalize its compliance" with the Trust-e program. What this means also isn't exactly clear, although Gratis officials have suggested the only thing Trust-e really wants is some training fees. But for the time being, at least, FreeiPods.com has not regained its Trust-e seal.

Since Trust-e seems a little more concerned with protecting Gratis' privacy -- and its own -- then telling FreeiPod users what may have happened to their personal information, it's a little difficult to know just how seriously we should take all this. But Trust-e has rarely revoked its certification, bending over backwards in some cases to let its sponsors keep their seals. Certainly the fact that children's privacy was one of issues involved suggests it's not a trivial case. And when you look at FreeIpod.com privacy policy, you also have to wonder about the material changes that were made. After all, anyone signing up for FreeiPods.com was already on notice that:

"We may work with other third party businesses using the personal information that you supply to us on the main signup page to bring selected retail opportunities to our members via direct mail, email and telemarketing. These businesses may include providers of direct marketing services and applications, including lookup and reference, data enhancement, suppression and validation and email marketing."

In other words, it doesn't seem like the change in practices that Trust-e found objectionable could be the fact that signing up with Gratis is going to lead to more junk mail, spam, and telemarketing calls. That was always part of the business plan, and anyone who signs up with any of these freebie pyramid schemes should realize it. But perhaps they didn't because they saw that Trust-e seal on the FreeIpods web page and thought it meant more than it does.

As an organization aimed at industry self-regulation of privacy, Trust-e certifies that the company follows its stated privacy policy. It doesn't, however, certify that the practices outlined in that policy are necessarily all that nice. Scan the list of Trust-e seal-holders and, among the industry giants, you'll also see various spyware and foistware creeps. Among the names on the list I recognized from things I've written or read are WhenU, Ezula, Reservation Rewards, and Webloyalty. But, however much we may deplore what some of these companies do, you can be pretty certain they aren't breaking any privacy laws, if for no other reason than the fact that the laws protecting our privacy are so pathetically weak that it's awfully hard to violate them.

Trust-E is what it is, so I'm not sure it's fair to expect it to be able to rein in all the bad actors whose privacy policies state perfectly clearly what they intend to do with the information you foolishly let them collect. Which makes the question of why Trust-e felt compelled to remove the Gratis Networks seal all the more intriguing. And it also raises an even more important question: can we leave it to industry to regulate its own Internet privacy practices?