December 2, 2010

FTC Proposes ‘Do Not Track’ Internet Tool

The Federal Trade Commission (FTC) proposed on Wednesday a series of safeguards to protect consumers' online privacy, including a "Do Not Track" tool that would let consumers prevent marketers from tracking their Web browsing patterns and other online behavior to conduct target advertising.

The FTC's five commissioners unanimously approved a preliminary staff report, which will serve as a framework for balancing online privacy and Internet innovation, the agency said.

The "Do Not Track" mechanism was inspired by the government's existing "Do Not Call" registry for telemarketers, and would allow consumers to choose whether to allow the collection of data regarding their online searching and browsing activities.

The report provides a comprehensive framework for protecting consumers' online and offline privacy, since personal data gathering often become ubiquitous without consumers' consent.

"Technological and business ingenuity have spawned a whole new online culture and vocabulary "“ email, IMs, apps and blogs "“ that consumers have come to expect and enjoy. The FTC wants to help ensure that the growing, changing, thriving information marketplace is built on a framework that promotes privacy, transparency, business innovation and consumer choice," said FTC Chairman Jon Leibowitz.

The agency said it hopes its report will help guide the marketing industry to develop better self-regulatory practices to address privacy.

These efforts have so far been "too slow, and up to now have failed to provide adequate and meaningful protection," the report read.

The framework outlined in the report also aims to reduce the burdens on consumers and businesses, said the FTC, the nation's main privacy policy and enforcement agency.

The FTC is also working to influence lawmakers, since the agency has limited authority to write these rules itself.

"This proposal is intended to inform policymakers, including Congress, as they develop solutions, policies, and potential laws governing privacy, and guide and motivate industry as it develops more robust and effective best practices and self-regulatory guidelines," read the report.

Safeguarding consumer privacy is of vital importance, since marketers are increasingly analyzing the websites that consumers visit, the links they click, their web searches, their online and offline purchases, the physical locations of their wireless devices and various types of personal information they disclose on social networking sites, the FTC said.

Leibowitz said that marketers have not done nearly enough to ensure that consumers understand the types of personal data that is being collected about them, or to provide users adequate control over that information.

The FTC envisions the "Do Not Track" tool as one important way to allow consumers the ability to opt out of much of the tracking that marketers conduct to provide more relevant advertisements -- a practice the industry calls behavioral advertising.

The new tool would most likely take the form of a constant setting on consumers' Web browsers, which informs websites when tracking and serving targeted advertising are blocked, even as the user surfs from site to site.

The tool is based on the FTC's National Do Not Call Registry, unveiled in 2003, which has been widely praised for allowing Americans to opt out of receiving unsolicited calls from telemarketers.

To date, more than 190 million people have listed their phones on the registry, and telemarketers who violate the registry face civil penalties up to $16,000 per incident.

Leibowitz said that while the technology has not been widely deployed for consumers, browser companies are testing it.  

Policymakers are also working to address the issue.

Bobby Rush (D-IL), chairman of the House Commerce subcommittee that oversees consumer protection issues, will hold a hearing on the potential Do Not Track legislation this Thursday.

However, the industry is apprehensive, saying that allowing consumers to turn off all online tracking could have unintended consequences, since tracking is used to deliver all types of personalized Web content in addition to online ads.

Mike Zaneis, senior vice president and general counsel for the Interactive Advertising Bureau, told the Associated Press that the "Do Not Call" analogy is flawed, since it is much easier to implement that list than to limit tracking on the many disparate networks that comprise the Internet.

On balance, however, Zaneis said he is happy with the FTC report since it encourages industry self-regulation.

The new FTC guidelines come amid growing concern in Washington and Europe about Internet privacy issues. 

The National Information and Telecommunications Administration, part of the U.S. Commerce Department, is also preparing to release a report on the matter. Meanwhile, the Obama administration's Office of Science Technology Policy has created a new group to develop broad online privacy principles as a guide for lawmakers and regulators.

Last month, the European Union announced plans to update its privacy regulations to give consumers more control over online tracking.


On the Net: