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[stephen at melbpc.org.au]

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F.T.C. Backs Plan to Honor Privacy of Online Users

By EDWARD WYATT & TANZINA VEGA www.nytimes.com Published: December 1, 2010


WASHINGTON — Signaling a sea change in the debate over Internet privacy, 
the government’s top consumer protection agency on Wednesday advocated a 
plan that would let consumers choose whether they want their Internet 
browsing and buying habits monitored. 

Saying that online companies have failed to protect the privacy of 
Internet users, the Federal Trade Commission recommended a broad 
framework for commercial use of Web consumer data, including a simple and 
universal “do not track” mechanism that would essentially give consumers 
the type of control they gained over marketers with the national “do not 
call” registry. 

Those measures, if widely used, could directly affect the billions of 
dollars in business done by online advertising companies and by 
technology giants like Google that collect highly focused information 
about consumers that can be used to deliver personalized advertising to 
them. 

While the report is critical of many current industry practices, the 
commission will probably need the help of Congress to enact some of its 
recommendations. 

For now the trade commission <www.ftc.gov/opa/2010/12/privacyreport.shtm> 
hopes to adopt an approach that it calls “privacy by design,” where 
companies are required to build protections into their everyday business 
practices. 

“Despite some good actors, self-regulation of privacy has not worked 
adequately and is not working adequately for American consumers,” Jon 
Leibowitz, the chairman of the trade commission, said. “We’d like to see 
companies work a lot faster to make consumer choice easier.” 

Many of the problems the F.T.C. is trying to tackle involve third parties 
that use technology to surreptitiously follow a user around the Web, 
collecting data and then selling it, usually without the user’s 
knowledge. 

“Our main concern,” Mr. Leibowitz said, “is the sites and services that 
are connecting the dots between different times and places that a 
consumer is online and building a profile of what a consumer is doing.” 

The recommendations, which were contained in a 79-page report, were 
cautiously received by browser makers including Google, Mozilla and 
Microsoft, who said they would examine the report and provide feedback to 
the commission. 

Mike Zaneis, the senior vice president and general counsel of the 
Interactive Advertising Bureau, said the industry generally supported the 
concepts proposed but opposed some of the strict measures preferred by 
consumer advocates. 

The online advertising industry, Mr. Zaneis said, would 
suffer “significant economic harm” if the government controlled the do-
not-track mechanism and there was “a high participation rate similar to 
that of do not call.” Mr. Zaneis said the industry would continue to 
build upon a self-regulatory framework and had recently put in place the 
use of icons on select online advertisements that allow users to opt out 
of customized advertising. 

“If your goal is to have a red flashing icon that says, ‘Click here to 
opt out of targeting,’ and to incentivize people to opt out, then we 
don’t share that goal,” Mr. Zaneis said. 

Currently, millions of Internet users who want to opt out of behavioral 
tracking have to navigate their browser privacy controls, download plug-
ins or opt out by clicking on an icon near an ad that is part of the 
industry self-regulatory program. 

The report recommends that companies adopt simpler, more transparent and 
streamlined ways of presenting consumers with their options rather than 
the “long, incomprehensible privacy policies that consumers typically do 
not read, let alone understand.” And the report recommends that data 
brokers give consumers “reasonable access” to any data they have 
collected. 

Mr. Leibowitz said the commission’s report was not a call for legislation 
but a guide to lawmakers and regulators. 

“Most of us on the commission believe it is time for a ‘do not track’ 
mechanism,” Mr. Leibowitz said. But at least one commissioner refused to 
support the issuance of a report that included requiring the mechanism. 

In addition, David C. Vladeck, director of the commission’s consumer 
protection bureau, said Wednesday at a conference sponsored by Consumer 
Watchdog, “I do not think that under the F.T.C.’s existing authority we 
could mandate unilaterally a system of ‘do not track.’ ” 

The F.T.C. report asks for the public and industry to comment on its 
recommendations and to make other suggestions over the next two months. 

On Thursday, the House Subcommittee on Commerce, Trade and Consumer 
Protection will hold a hearing to examine the feasibility of a simple 
method of opting out of online tracking. 

If Congress were to mandate a “do not track” feature, it could upend the 
business models of some advertising agencies and companies who gather 
consumer data and build profiles of Internet users. But it would not 
prevent basic targeted advertising, where an individual site serves up 
ads related to a search terms. 

Marc Rotenberg, the executive director for the Electronic Privacy 
Information Center, said the proposal of a ‘do not track’ mechanism was 
an important step but not the end of the conversation. 

“There’s a growing sense that the online ad industry is out of control 
from a privacy perspective and that some rules need to be put in place,” 
said Mr. Rotenberg, whose organization has not decided whether to support 
the ‘do not track’ proposal. “I don’t think we’re at the point yet where 
we can say ‘do not track’ is the silver bullet when it comes to online 
advertising.” 

The makers of the most widely used Web browsers said Wednesday that they 
supported consumer privacy and had already made efforts to protect it as 
part of their products. 

In a statement, Google said, “We agree with the F.T.C. that people should 
be able to understand what information they share and how it’s used. 
That’s why we simplified our privacy policies earlier this year, offer 
control through our privacy tools, and explain our approach to privacy in 
plain language and through YouTube videos in our privacy center.” 

Harvey Anderson, general counsel for Mozilla, stated in a blog 
post: “While we’ll need more time to digest and evaluate the details, 
we’re encouraged by what we’ve seen so far. In particular, the F.T.C. has 
proposed a set of principles that align well with the Mozilla manifesto 
and our approach to software development.” 

Apple, which makes the Safari browser, declined comment. In a statement, 
Microsoft said that the latest version of its browser, Internet Explorer 
8, “has some of the most robust privacy features on the market,” 
including features it calls InPrivate Browsing and InPrivate Filtering, 
which allow a user to browse the Web without being tracked. 

But those types of features also illustrate some of the shortcomings that 
the F.T.C. found in current industry efforts. The Microsoft browser 
requires a user to set those enhanced privacy controls at the start of 
every new browsing session. 

Chris Soghoian, a privacy and security researcher, said using privacy 
options in most Internet browsers “doesn’t do much.” 

At the Consumer Watchdog conference, Mr. Soghoian said that because many 
of the companies that make Web browsers are also supported by advertising 
networks, “the design decisions are motivated by a desire not to hurt 
their advertising divisions.” 

“The situation right now is laughable,” he added. “There certainly isn’t 
a single one-stop shop.” 

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Cheers,
Stephen