Monday, November 05, 2007

Privacy, Consumer Groups Ask FTC for “Do Not Track List”

This posting was written by William Zale, Editor of CCH Privacy Law in Marketing.

A group of nine privacy organizations have asked the Federal Trade Commission to create a "Do Not Track List" intended to protect consumers from having their online activities unknowingly tracked, stored, and used by marketers and advertising networks.

The organizations—Center for Democracy and Technology, Consumer Action, Consumer Federation of America, Electronic Frontier Foundation, Privacy Activism, Public Information Research, Privacy Journal, Privacy Rights Clearinghouse, and World Privacy Forum—also asked the FTC to provide other consumer privacy protections.

The “Do Not Track List,” which would function much like the national "Do Not Call" list, is recommended as part of a broad effort to correct a perceived "privacy imbalance" that has deprived Americans of the ability to control their own valuable personal information.

The groups offered the recommendations in a letter to the Commission in advance of its two-day town hall, "Ehavioral Advertising: Tracking, Targeting, and Technology," scheduled for November 1-2 in Washington, D.C. (See story below.)

The letter also recommends:

Adopting a new definition of "personally identifiable information" updated to reflect the realities of today's Internet;

Providing more robust disclosures to consumers about behavioral tracking;

 Ensuring that information about consumer privacy and choices is available to all individuals, including those who have visual, hearing, or other disabilities;

 Independent auditing of those engaged in behavioral tracking to ensure adherence to privacy standards;

 Furnishing consumers with access to personally-identifiable information collected about them by companies engaged in behavioral tracking;

 Prohibiting advertisers from collecting and using personally identifiable information about health, financial activities, and other sensitive data; and

 Establishing a national "Online Consumer Protection Advisory Committee."

Text of the letter appears at the websites of both the Center for Democracy and Technology and the World Privacy Forum.

FTC Forum Explores Online “Behavioral Advertising”

This posting was written by John Scorza, CCH Washington Correspondent.

The growth of online advertisements that target individual consumers and their online activities has led to growing concerns about consumer privacy.

The Federal Trade Commission convened a forum—"Ehavioral Advertising: Tracking, Targeting, and Technology," November 1-2, in Washington, D.C.—to explore the issues involved in the practice of “behavioral advertising.” Companies that employ “behavioral advertising” track consumers’ online activities and target advertisements to the consumers based on their activities and interests.

Online behavioral marketing is big business, FTC Commissioner Jon Leibowitz said. Companies spent nearly $10 billion on Internet ads in the first half of this year. Within the world of online advertising, the use of targeted ads is prevalent and expected to become even more widely-used in coming years, according to Lydia Parnes, director of the FTC’s Bureau of Competition. At the same time, marketers are seeking to substantially expand the information they collect and analyze to increase the precision of their behavioral ads, Parnes said.

Awareness of Online Tracking

These trends have attracted the attention of the agency. FTC Chairman Deborah Majoras remarked, “There are legitimate concerns about whether consumers are aware that their activities are being tracked online and about whether data, once stored and combined with other data, could somehow find its way into the wrong hands.”

FTC Commissioner Jon Leibowitz is similarly concerned. “I think all of us should be concerned, even troubled, that seemingly-anonymous searching and surfing can be tracked back to specific individuals and that not all information that companies have collected about us is secure from data breaches or release.”

Participants at the FTC forum noted that consumers have various expectations about privacy. And while they may appreciate ads that are of personal interest, it is unlikely they are aware of what information companies are collecting about them and how it is being used and stored.

Absence of Regulation

The practice of behavioral advertising is largely self-regulated by the industry, but a number of participants at the forum criticized the current system. Leibowitz said the privacy policies established by the industry are filled with fine print and legalese, leaving much to be desired. “One thing is clear: The current “don’t ask, don’t tell” mentality in online tracking and profiling needs to end,” Leibowitz said.

Leibowitz and other participants called for greater consumer control and transparency in online privacy policies. The FTC Commissioner suggested that standard privacy policies may be desirable, as well as shorter notices about what information is being collected. Consumers could be given the choice to opt-in to allowing companies to collect information about their online activities, Leibowitz proposed.

“Do-Not Track” List

One proposal discussed by forum participants was the creation of a “do-not-track” list, similar to the agency’s Do-Not-Call registry, which prohibits telemarketers from calling consumers who have registered their telephone numbers with FTC. Leibowitz called the “do-not-track” proposal as a “very promising approach.” Other possible approaches mentioned by participants involved reforms to the self-regulatory online advertising system and better consumer education.

The basic issue comes down to finding the proper balance between the benefits of behavioral advertising and consumer privacy concerns, said Joel Winston, deputy director of the FTC’s Division of Privacy and Identity Protection.

Can disclosures be more effective? Is self-regulation appropriate? Is government involvement required? Winston and other FTC officials indicated that the agency would continue to explore these and related issues.

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