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January 2011

Internet Privacy Becoming
a Consumer Protection Issue


The media have been recently focusing on the considerable amount of identifying information being gathered by advertisers who use online-tracking software on individuals surfing the Internet. According to PrivacyChoice.org, more than 274 companies are sweeping up this type of information and are building detailed databases on people to track your personal preferences while you are online so that they can then target advertising to you.

I have written before in this column about the amount of personal information consumers voluntarily give up online because have no idea that they can, or should, limit the “cookies” that are tracking their online activities. I daily delete nearly all cookies that advertisers and others seek to load on my computer. But despite my considerable efforts to protect my online privacy, I still see quite a bit of targeted advertising on media sites that I visit.

In response to rising public concern and concerns expressed by Republican and Democratic members of Congress, the Federal Trade Commission (FTC) is calling for the development of a “do not track” system that would allow you to “choose whether to allow the collection of data regarding your online searching and browsing activities.” Up to now, the federal government has expected marketing companies to regulate themselves. However, in early December FTC Commissioner Jon Leibowitz said, “Self regulation of privacy has not worked adequately and is not working adequately for American consumers. We deserve far better.” His comments came in response to an FTC staff report that faulted the industry for not doing enough to protect consumer privacy online.

In its report, the FTC calls for requiring: 1. creation of a “do not track” tool in web browsers, 2. companies to notify consumers as they collect data, not just in a more generic privacy policy that is read by very few people, and 3. companies to incorporate private protections in designing new software products. The FTC stops short of calling for legislation because companies such as Microsoft, Apple, Mozilla, and Google are reportedly working on “do-not-track” tools in their browsers and the FTC wants to give these companies a short amount of additional time to get this work done.

The online ad industry rejects the FTC’s call because it argues that it allows consumers to “opt-out” of receiving targeted ads, much like the Direct Marketing Association argued against state “do-not-call” telemarketing laws because they allowed people to opt out of some telemarketing calls. However, the advertising industry’s online ad marketing site, www.aboutads.info, only includes targeted ads for about 60 of the estimated 274 companies using tracking technology. Furthermore, Mike Zaneis of the Interactive Advertising Bureau argued in congressional testimony that online advertising is responsible for $300 billion in economic activity.

As noted above, Mozilla, the maker of the Firefox web browser, is one company that has been working on a “do-not-track” mechanism. However, according to the Wall Street Journal, the company stopped its efforts due to pressure from ad-industry executives. Mozilla denied this and argued that it did so because it was concerned advertisers would use even sneakier techniques or that the mechanism would slow down the loading and performance of website.

What do you think about this major privacy issue? You can let the FTC know by contacting the agency through: www.ftc.gov/ftc/contact.shtm.

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