In a few hours, approximately between 10-11 am eastern, the FTC is expected to release its final “Online Behavioral Advertising Principles.” Originally released for comment in December 2007, the principles are a sort of Valentine’s Day present to the online ad industry from the (supposedly departed) Bush Administration. From what we know, the FTC principles support self-regulation. Online marketers will be told they should behave better–and here are suggestions. It’s like a teacher telling a misbehaving student–‘behave better, dear,’ or else we will have to tell your parent (in this case, the guardian being potential congressional action).
My CDD urged Commissioners Harbour and Leibowitz to issue separate statements on the principles, and call for tougher requirements—especially in the area of so-called sensitive information. This would include data connected to our financial and health related online activities (think mortgage and loan applications or queries for prescription drugs). CDD and a coalition of groups also formally asked the commission to impose serious privacy safeguards for both children and adolescents.
But these principles were crafted within the narrow confines of the Bush Administration philosophy prevailing at the FTC. Only self-regulation is permitted. Consequently, such an approach likely means these rules leave the online data collection, profiling and targeted marketing system which comprise behavioral marketing off the privacy protection hook.
But one question looms at the moment. Why has the new Obama administration allowed the FTC to remain under the leadership of Bush-appointee William E. Kovacic? The principles being issued today, in fact, reflect the “old” FTC, not one run under the philosophy of President Obama. Why is the Obama White House failing to ensure a change of leadership at the FTC? The agency is responsible for overseeing a huge portion of the economy, including critical financial issues. It’s also supposed to be the leading agency on consumer protection issues.  The Obama White House should have–by now-found someone who would led the FTC, so it can better protect the public.
The principles being released today were only made possible because of the Bush FTC give-away to Google, when it approved its takeover of online ad giant DoubleClick. CDD, the Electronic Privacy Information Center (EPIC), and USPIRG fought the merger, including on privacy grounds. FTC Commissioner Pamela Harbour played a key role forcing the agency (then run by Chairwoman Majoris, whose husband’s law firm represented DoubleClick) to address the privacy concerns. As a consequence of the political pressure from its failure to seriously examine the consumer privacy issues of the Google deal, the FTC staff were told to develop these principles.
The next chair of the FTC needs to take privacy and online consumer protection issues seriously. The agency does need more resources, but also a new spirit. If the FTC had been on the job, and was examining how lending institutions were recklessly promoting loans and mortgages, maybe today’s mess wouldn’t be as tragic as it is. More to come after the commission releases the principles.
