The Federal government today is asking whether consumers have to be naked in cyberspace.

The U.S. Department of Commerce and Federal Trade Commission this morning opened a one-day workshop on online "profiling" -- the practice of pulling together information about consumer interests and habits based largely on tracking their online life. Internet businesses, consumer advocates and others are exchanging views about the technologies used to create user profiles, the implications for online privacy and the possible role of industry self-regulation.

"It is far better for the market to respond than for governments around the world to take action," Commerce Secretary William Daley said this morning to an audience of several hundred people who filled the department auditorium.

DoubleClick Inc., one of the largest companies that amasses information about Web surfers, said in comments filed with the FTC before the event that the practice has benefits for business and consumers alike: "User-defined sub-categories including sports, youth and finance make it easy for advertisers to find and target their desired audiences."

DoubleClick itself has raised concerns among privacy advocates last summer when it announced it would buy Abacus Direct, a company that has compiled the catalogue buying habits of 88 million households.

"We are moving toward a surveillance society, where citizens can expect that whenever they sit in front of a computer screen, all their online actions will be compiled," wrote Ram Avrahami, an online privacy activist, in FTC filings.