[I spoke yesterday at the beginning of a two-day hearing at the FTC. There wasn’t time to say my complete prepared remarks. Here it is]:
Exactly one year agoâ€”November 1, 2006â€”the Center for Digital Democracy and the USPIRG filed a 50-page complaint asking the commission to â€œundertake an immediate, formal investigation of online advertising practices.â€ When we met with Chairman Majoras soon after, it was evident from her interest that she recognized we had identified a series of major consumer privacy concerns. Commissioners Leibowitz and Harbour expressed concern as well. Over the last year, I have come to admire the hard work and dedication of the FTC privacy staff.
But we believe the time for fact-finding is over. The commission is the designated federal agency that is supposed to safeguard consumer privacy. It must now act to protect Americans from the unfair and deceptive practices that have evolved as part of what the industry calls the â€œinteractive marketing ecosystem.â€ As we stated last year, “The data collection and interactive marketing system that is shaping the entire U.S. electronic marketplace is being built to aggressively track us wherever we go, creating data profiles to be used in ever-more sophisticated and personalized “one-to-one” targeting schemes.” This is true today across all platforms: PCs, cell phones, social networks, broadband videos, even eventually TV.
Few members of the public understand this (as the new Annenberg/Samuelson poll analysis shows). They donâ€™t know that when theyâ€”and their childrenâ€”go online, marketers are digitally shadowing there ever move. Interactive marketersâ€”and the technologies being deployed (from behavioral targeting and retargeting, immersive rich media and with new forms of social network profiling)â€”are helping create a commercial surveillance society. Our every move, interests, even mouse clicksâ€”tracked, tabulated, stored and then used or sold to the highest advertiser bidder.
Yes, online marketers. You can track, collect and use for commercial purposes when someone searches for a health concernâ€”such as their child’s use of Ritalin. But just because you can do it doesnâ€™t mean its right.
Yes, digital advertisers can behaviorally target consumers looking for a sub prime mortgage and sign them up. But just because you can do it doesnâ€™t mean its right.
And, online marketers can eavesdrop on the members of social networks, including the harvesting of their personal profiles for commercial purposes. But just because you can do it doesnâ€™t mean its right.
The online marketing industry is trying to hide behind a number of things, inc. the facetious claim that much of what they collect isnâ€™t personally identifiable. They claim they respect the privacy of children and teenagers. We are given assurances that all these services are to make our online experiences more personalized and convenient. But personalization doesnâ€™t require the creation of a wholesale data collection system. Yes, online advertising plays a critical role for the â€œmonetizationâ€ of content, esp. the news, information and culture a civil society requires. But the industriesâ€”and its trade groupsâ€”have so far failed to provide the necessary leadership to address privacy concerns.
That is why today, CDD and USPIRG are filing an amended complaint. We provide abundant details about new and emerging privacy threats since November 2006. We show how children and teens are the focus of behavioral targeting; how online mortgage loan and lead generation companies have contributed to the recent national tragedy where too many Americans lost their homes; we provide a disturbing window on the target marketing and data collection practices used by social networks, inc. MySpace and Facebook. It discusses new forms of racial and ethnic profiling. We also remind the commission that we urged it one year ago to investigate the already disturbing growing consolidation in the online advertising and marketing industry. A warning that was before the new wave of takeovers including : Microsoft/aQuantive and AdECN; Yahoo!/Blue Lithium and Right Media; TW/AOL and Tacoda, Third Screen Media and AdTech AG; WPP and 24/7; and, of course, Google/Doubleclick.
We want to underscore that the privacy threats arising from the Google/Dclick merger are the gravestâ€”and we urge the commission to act on the EPIC petition.
Just because online advertising is helping paying for the content doesnâ€™t give the industry carte blanche to unleash a wide spectrum of abusive practices. No one is saying you canâ€™t engage in marketing in this new era. But we need rulesâ€”not a lawless â€œwild west.” Some in the industry are offering an implicit fear tactic: suggesting that if you are messing around with advertising you will kill the golden goose of the digital economy and online content. That’s absurd and untrue. What we are saying is we need governmental rules and action from the leading companies to protect consumer privacy. The trade groups have failed to provide any real leadershipâ€”which is why self-regulation has failedâ€”and cannot truly work. In addition new online privacy channels run by interactive marketers such as Google should not be propaganda toolsâ€”they must foster a broad public debate about the roleâ€”and harmsâ€”of the online medium.
Itâ€™s time for the FTC to protect consumers by fully implementing and enforcing Fair Information Practices, as proposed by the OECD. Unless the commission does this, our privacyâ€”and that of our childrenâ€”will be increasingly at risk. The time for fact-finding is over. Our data collection and behavioral targeting models are being exported abroad, posing risks to EU consumers (as we explained recently to the Article 29 Working Group). As incidents such as the public exposure of personal information collected by AOL of our searches revealed, the vast gathering of information by marketers also raise concerns about identity theft and fraud.
The question is: will the FTC act to protect the US public and help ensure that the Internet and other online media is a safe environment for communications and commerce.
We wait its answer.
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