September 8, 2009

House Bill Takes Aim At Web Privacy

Your every move on the Web is being meticulously observed and recorded, according to an Associated Press report. 

Whether you're checking your bank account balance, buying a book or watching "The Evolution of Dance" on YouTube, you are being watched.  But not by a Big Brother government or foreign hackers, but by advertising companies, looking for clues about your buying habits and constructing your perfect consumer profile.

However, in recent years, a number of consumer advocacy groups and privacy watchdogs have begun crying "foul," contending that most Web surfers are clueless that their every mouse-click is being tracked.

Cue Congress. 

In response to the Web privacy dilemma, Democratic House member Rick Boucher of Virginia, chairman of the House Energy and Commerce Subcommittee on Communications, Technology and Internet, is currently putting together a piece of legislation that he hopes will curb this practice.  His bill seeks to implement federal regulations on the Web that will require websites to inform consumers regarding what kind of information is being collected on them, how it is being used and how they can control it.

"Our goal is not to hinder online advertising," explained Boucher in defense of his bill.  "This [bill] will make people more likely to trust electronic commerce and the Internet."

Fully aware that they are increasingly coming under the scrutiny of Big Brother's watchful eye, the online marketing industry has already attempted to head off federal interference in the market by adopting a set of voluntary, self-regulatory guidelines in July.

Still, a number of privacy groups believe that self-imposed regulation will not suffice to curb the increasingly invasive and high-tech methods employed by Internet advertisers to monitor consumer's online activities.

"Consumers have no idea that they are being followed online and that their information is being compiled into invisible digital dossiers," Jeffrey Chester, executive director of the watchdog group Center for Digital Democracy, told AP.

"There is an incredibly sophisticated, ever-advancing system for profiling online users," he added.

Chester points to a number of trends and events in recent years that have made the issue of Internet consumer privacy more relevant than ever.  Among them has been the explosive popularity of social networking sites like MySpace and Facebook, along with Google's take-over of the Web-advertising agency DoubleClick Inc. and a prospective partnership between Microsoft Corp. and Yahoo Inc.

"Online privacy has finally taken off and become a serious political issue.  A perfect digital storm has created momentum toward action," says Chester.

But privacy concerns are not the only issue at stake in the debate.

A number of Web experts are concerned with the possibility that heavy regulation will smother online advertising, a perfectly legitimate and even helpful branch of marketing.  Not only are online ads needed to support most of the thousands of websites that consumers browse daily, but they also bring tailor-fitted products and services to the consumer's attentions and are more effective"”and arguably less obnoxious"”than tradition blanket-advertisements used in television and radio.

Boucher says that his bill would seek a middle ground between protecting consumers' rights and stifling the Internet's business structure.

Privacy watchdog groups say they would generally like to see an "opt in" program, whereby consumers can choose to let a website collect data on them by giving their explicit permission.  Web advertising agencies, on the other hand, contend that such a regulation would overwhelm consumers with annoying privacy notices every time they visit a new website.  Allowing consumers to "opt out" of data collection, say ad agencies, would be a far more practical approach.

Boucher would like to see different categories of regulatory rules for different websites, corresponding to the level of sensitivity of information being dealt with.  Websites working with highly personal information like Social Security numbers, sexual preferences and medical data would thus be subject to much stricter standards.

Yet despite the intended flexibility of Boucher's potential regulations, most industry experts fear that they would not be flexible enough to keep pace with a market that is known for evolving at lightning speed and argue that they would inevitably stifle innovation and industry development.

"Legislation would be too rigid because this is a moving target," Dan Jaffe, executive VP for the Association of National Advertisers, told AP.

Jaffe maintains that self-regulation is the only viable long-term approach for this dynamic industry.

Arguing the case for self-regulation, Vice President of the Interactive Advertising Bureau Mike Zaneis, says that it is in an advertiser's best interest to gain consumers' trust by exercising discretion and transparency in their ad practices.

"At the end of the day, the most important asset any online company has is a strong relationship with the consumer."


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