Senator Jay Rockefeller, a Democrat from West Virginia, said his "Do Not Track Online Act of 2011" will offer a "simple, straightforward way for people to stop companies from tracking their every move on the Internet."
"Consumers have a right to know when and how their personal and sensitive information is being used online -- and most importantly to be able to say 'no thanks' when companies seek to gather that information without their approval," Rockefeller said in a statement.
In the House of Representatives, Joe Barton, a Republican from Texas, and Edward Markey, a Democrat from Massachusetts, released a draft of a separate "Do Not Track" bill aimed at protecting children online.
US senators John Kerry and John McCain introduced an online privacy bill last month that would require companies gathering data to allow a consumer to "opt-out" of having their information collected.
The former Democratic and Republican presidential candidates said their bill seeks to strike a balance between protecting the personal information of Web users and the needs of businesses to conduct electronic commerce.
The flurry of legislation comes amid a series of high-profile data theft incidents, including the theft of personal information from more than 100 million Sony accounts, and controversy over tracking technology in Apple's iPhone and in smartphones running Google's Android software.
Apple and Google are to attend a congressional hearing on privacy next week following claims the iPhone and Android devices regularly track a user's location and stores the data.
"We look forward to engaging with policymakers about how we protect our users' mobile privacy," Google said in an email to AFP.
Google explained that people must opt-in to use location-sharing on Android-powered smartphones and get to control how data is used.
"Any location data that is sent back to Google location servers is anonymized and is not tied or traceable to a specific user," the Mountain View, California-based Internet titan said.
Apple vice president of software Guy Tribble was listed as representing the Cupertino, California-based iPhone, iPad and iPod maker at the hearing.
Apple on Wednesday released updated software for iPhones to fix "bugs" that resulted in location data being unencrypted and stored for up to a year.
The changes came in an iOS 4.3.3 software update.
Apple has denied tracking iPhone users, maintaining that locations of Wi-Fi hotspots and cell towers was used for services such as navigation or targeted ads.
Rockefeller, chairman of the Senate Commerce Committee, said his bill would create a "legal obligation" for all online companies to honor the choice of consumers who say they do not want to be tracked online.
It would give the Federal Trade Commission the power to pursue any company that does not honor the request.
Barton and Markey, the co-chairmen of the Bi-Partisan Congressional Privacy Caucus, said their "Do Not Track Kids Act of 2011" establishes new protections for the personal information of children and teenagers.
"For millions of kids today, the Internet is their new 21st century playground," Markey said in a statement. "But kids growing up in this online environment also need protection from the dangers that can lurk in cyberspace."
The bill would notably require online companies to obtain parental consent before collecting children's personal information and prohibit them from using personal information of children and teens for targeted marketing.
It would also create an "Eraser Button" for parents and children that would allow users to eliminate publicly available personal information content "when technologically feasible."
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