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Yesterday, 12/7 the Federal Trade Commission hosted a variety of roundtables on the subject of Exploring Privacy.
While FTC Chairman Jon Leibowitz may have said in his opening remarks that the FTC didn’t know what to expect from the event, he was clear that his agency feels like more work needs to be done in the area of online privacy.
Chairman Leibowitz kicked things off by speaking of Justice Brandeis’s – world renowned reformer – seminal work on privacy. He was concerned about “numerous mechanical devices, in that what was whispered in closet, could be proclaimed from housetops”. At the time, he was referring to photography.
He covered several main points. The FTC has been building on the Feb behavioral marketing principles to take a look at privacy. Advances allow for extraordinary benefits for consumers, while the costs for data collection are approaching zero, and storage costs are extremely low. Companies can store and crunch vast amounts of data and behavioral targeting is one of many ways they can use data. Currently, in the Internet advertising space, there’s a question of how many people understand intermediary roles. Do consumers know how cookies work, and the difference between 1st and 3rd party cookies? If they were tracked in a mall, how would consumers react to a similar level of scrutiny?
Chairman Leibowitz asked “What to expect from this workshop? We don’t yet know … We have open minds… notice and choice – and later, harm based approach – haven’t worked as well as we like…We’re trying to think through what’s good for consumers and fair to business… ”
Throughout the day, specifically in Commissioner Pamela Jones Harbour’s remarks, there appeared to be a common theme, that the current model was broken, that consumers don’t read privacy notices, and that the “advise and consent” model is broken.
The panel of most interest to Shop.org members was on Online Behavioral Advertising. The panel was moderated by Peder Magee and Michelle Rosenthal from the Division of Privacy and Identity Protection. The staff was very focused on consumer expectations and choice in their questioning of the panelists. They repeated the notion that consumers are unaware that their browsing history is being tracked or that they are being served behavioral ads. The staff also seemed to assert that it is too burdensome for many consumers to find tools to opt out.
The panelists were:
- Jeff Chester, Executive Director, Center for Digital Democracy
- Amina Fazlullah, Counsel, U.S. PIRG
- Dave Morgan, CEO, Simulmedia, Inc.
- Zoë Strickland, Vice President, Chief Privacy Officer, Walmart
- Berin Szoka, Director, Center for Internet Freedom, The Progress & Freedom Foundation
- Omar Tawakol, CEO, BlueKai
- Craig Wills, Associate Professor, Computer Science, Worcester Polytechnic Institute
- Linda Woolley, Executive Vice President, Government Affairs, Direct Marketing Association
The session prompted heated discussion of the space, and there will likely be further followup from the FTC. We’ll keep you posted on new developments. In the meantime, here are some links that may be helpful:
- FTC Overview webpage
- Chairman Leibowitz’s opening remarks
- Coverage in the WSJ
- Coverage in the NY Times
