Do you ever wonder how the ads that show up on websites you view seem strangely relevant (or humorously irrelevant? Targeted advertising has long been standard practice on the world wide web, but now the government is taking a closer look. Last week, Congresswoman Jackie Speier introduced legislation aimed at allowing consumers to prevent companies from tracking their information online. The so-called “Do Not Track Me Online” Bill authorizes the FTC to promulgate an online opt-out mechanism whereby consumers can prevent the collection or use of the consumer’s online activity, unique identifying information, or other personal information. In a statement introducing the bill, Rep. Speier said the bill “send[s] a clear message - privacy over profit.”
In addition to a catchy moniker, the bill, or at least the impetus behind it, seems to have widespread public support. USA Today and Consumer Watchdog both recently conducted polls to gauge the public’s concern over online privacy. In the USA Today poll, 65% of Facebook users and 52% of Google users said they were “somewhat” or “very concerned” about their privacy while using those sites. In the Consumer Watchdog poll, 90% of respondents supported the notion that it is “important” to have “more laws that protect the privacy of your personal information,” and when asked specifically what measures they would like, respondents indicated a strong desire to block tracking of personal information.
The FTC weighed in, issuing its own privacy report endorsing “Do Not Track” legislation and proposing a framework to protect consumers. The report notes the repeated shortcomings of the online industry’s self-regulation, as it has been “too slow, and up to now ha[s] failed to provide adequate and meaningful protection.” The FTC’s proposed framework consists of recommending businesses incorporate “’privacy by design’ approach by building privacy protections into their everyday business practices.” Further, companies should simplify consumer’s choices about data collection and storage by giving them the choice when they are making decisions, not at the end of a long privacy statement filled with legalese.
Despite this broad support, not everyone is sold on the need for “Do Not Track” legislation. Critics point out that such legislation will have an adverse effect on ad-supported resources. Companies pay more for targeted advertising because such advertising will be more effective. Reducing this effectiveness means companies will pay less for ads on websites. As web content provider’s ad space becomes cheaper, they will thus likely face reduced revenue which may ultimately impact the quality of the content or force providers to charge for content. In a recent PBS roundtable on the topic, Yahoo's chief trust officer Anne Toth stated "I think it's critical that people realize that collecting data about consumers online gives enormous benefits. Right now, advertising makes the Internet free. And people want a free Internet. And information leads to innovation and ideas. What I'm worried about most is that with 'Do Not Track' and government regulation, we throw out the baby with the bathwater and stifle innovation."
Additionally, some industry groups say the legislation is duplicative and that consumers already have the ability to opt-out of tracking through a recently-launched industry program: www.aboutads.info. In comments filed with the FTC, the groups argued that a competitive market and self-regulation, including already existing mechanisms designed to meet standards proposed in an FTC report on online behavioral advertising two years ago, is the most effective framework in this area of rapidly developing technological change. The group acknowledged that while the FTC’s proposed framework is useful in identifying issues, it may harm consumers as a regulatory mandate by generating unnecessary consumer concerns.
The debate is ongoing and will likely play out across the public forum. Indeed, Rep. Speier stated the WSJ What They Know series partly inspired her to introduce the bill. While some legislation is likely, what remains to be seen is how far it will go, so in the meantime, make sure to check your Facebook settings and secure your wireless network.
- Nancy Perkins and McCormick Conforti
