Category: Online advertising

The self-regulatory proposals released today [2 July 2009]  by five marketing industry trade and lobby groups are way too little and far too late. This move by the online ad industry is an attempt, of course, to quell the growing bi-partisan calls in Congress to enact meaningful digital privacy and consumer protection laws. It’s also designed to assuage a reawakened Federal Trade Commission–whose new chair, Jon Leibowitz, recently appointed one the country’s most distinguished consumer advocates and legal scholars to direct its Bureau of Consumer Protection (David Vladeck). The principles are inadequate, even beyond their self-regulatory approach that condones, in effect, the “corporate fox guarding the digital data henhouse.” Effective government regulation is required to protect consumers. We should have learned a painful lesson by now with the failure of the financial industry to oversee itself. The reckless activities of the financial sector—made possible by a deregulatory, hands-off government policy–directly led to the current financial catastrophe. As more of our transactions and daily activities are conducted online, including those involving financial and health issues–through PCs, mobile phones, social networks, and the like–it is critical that the first principle be to ensure the basic protection of consumer privacy. Self-dealing “principles” concocted by online marketers simply won’t provide the level of protection consumers really require.

The industry appears to have embraced a definition of behavioral targeting and profiling that is at odds with how the practice actually works. Before any data is collected from consumers, they need to be candidly informed about the process–such as the creation and evolution of their profile; how tracking and data gathering occurs site to site; what data can be added to their profile from outside databases; the role that data targeting plays on so-called first-party websites, etc. In addition, the highest possible consumer safeguards are necessary when financial and health data are involved. Under the loosey-goosey trade industry principles, however, only “certain health and financial data” are to be treated as a “sensitive” category. This would permit widespread data collection involving personal information regarding our health and financial concerns. The new principles, moreover, fail to protect the privacy of teenagers; nor do they seriously address children’s privacy. (I was one of the two people that led the campaign to enact the Children’s Online Privacy Protection Act).

The failure to develop adequate safeguards for sensitive consumer information illustrates, I believe, the inability of the ad marketing groups to seriously address online privacy. The so-called “notice and choice” approach embraced by the industry has failed. More links to better-written privacy statements don’t address the central problem: the collection of more and more user data for profiling and targeting purposes. There needs to be quick Congressional action placing limits on the collection, use and retention of consumer data; opt-in control over profile information; and the creation of a meaningful sensitive data category. Consumer and privacy groups intend to work with Congress to ensure that individuals don’t face additional losses due to unfair online marketing practices.

[press statement by the Center for Digital Democracy]