Consumer Groups Call for Online Privacy Guarantees

Posted by: Rob Hof on September 1, 2009

A group of 10 consumer and privacy watchdog groups this morning called for Congress to clamp down on online tracking of people’s behavior to target advertising to them as they traverse the Web. In a letter to Representatives Henry Waxman and Joe Barton, respectively the chairman and ranking member of the House Committee on Energy and Commerce, the group put forward a set of principles and recommendations they hope will be included in expected legislation this fall.

It’s the first united push by the group, which includes the Center for Digital Democracy, the U.S. Public Interest Research Group, the Electronic Frontier Foundation, and Consumers Union, against the Internet industry’s opposition to any legislation to limit ad targeting. The Federal Trade Commission is looking at more stringent oversight on online privacy, and Congress is expected to put forward a bill as early as this month that would impose new regulations on the industry.

Among many recommendations, these are the key points the consumer and privacy coalition wants to see in any legislation:


· Sensitive information should not be collected or used for behavioral tracking or targeting.

· No behavioral data should be collected or used from anyone under age 18 to the extent that age can be inferred.

· Web sites and ad networks shouldn’t be able to collect or use behavioral data for more than 24 hours without getting the individual’s affirmative consent.

· Behavioral data shouldn’t be used to unfairly discriminate against people or in any way that would affect an individual’s credit, education, employment, insurance, or access to government benefits.

While these principles sound reasonable, they represent a stark change from the situation today, where marketers are relatively free to collect data on consumers’ travels around the Net. Although behavioral targeting to date is used in only a small portion of online advertising, it’s seen as a key to making ads more effective and lucrative in the future. So advertisers and Web publishers, including Google and Yahoo, are sure to be strongly opposed to anything but voluntary rules. They fear that such limits—especially a so-called opt-in requirement that they get specific consumer approval to collect and use data on consumer behavior to target ads—could damage the prospects of a wide range of online companies that depend on advertising.

It seems unlikely the full range of suggestions here will survive intense industry lobbying. And it may be that most consumers don’t care all that much about ad targeting in particular. Indeed, the industry makes a reasonable argument that most people would prefer useful ads to ads that have nothing to do with what they’re interested in. That’s why Google’s search ads have been so effective.

Nonetheless, the less laissez faire mood of the country today, and of Congress in particular, makes it likely that marketers and publishers will be compelled to disclose much more about what data they’re collecting and agree to limits on how they can use it. That’s not necessarily a bad thing even for marketers; I’m not convinced that the commercial Web will go dark if such limits are imposed, as some marketing advocates imply. There’s ample evidence that with some transparency and control, consumers will give up a certain amount of privacy for the chance at better deals or even simply a better online experience.

The key will be coming up with a workable mechanism for consumers to make this trade more consciously—one that isn’t so intrusive that it impedes use of the Internet. If such a mechanism emerges from the coming battle over privacy legislation, that seems likely to be a good thing for all concerned.

Reader Comments

Steve

September 2, 2009 3:43 PM

This will be interesting to watch. I read an article the other day implying consumers might be opening up to behavioral targeting.

Here's a blog post that provides a different perspective on the issue: http://lunchpail.knotice.com/2009/09/02/consumer-groups-unite-to-expand-the-data-debate/

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Bloomberg Businessweek writers Peter Burrows, Cliff Edwards, Olga Kharif, Aaron Ricadela, and Douglas MacMillan, dig behind the headlines to analyze what’s really happening throughout the world of technology. Tech Beat covers everything from tech bellwethers like Apple, Google, and Intel and emerging new leaders such as Facebook to new technologies, trends, and controversies.

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