Self-regulation is way forward in addressing consumers’ actual privacy concerns

On December 1, the FTC released a staff report entitled: “Protecting Consumer Privacy in an Era of Rapid Change.”

The document was based on information gathered by FTC staff during a series of workshops that began on December 7, 2009 (notably Pearl Harbor Day), and concluded on March 17, 2009. The purpose was to “explore” privacy issues of all kinds on all types of platforms. The workshops themselves were, in turn, very much an outgrowth of the FTC’s 2009 proposed self-regulatory framework for behavioral advertising.

Back at the first workshop last December, Chairman Liebowitz plainly stated in his opening remarks that, “I’d argue that we’re at another watershed moment in privacy, and that the time is ripe for the Commission to build on the February behavioral targeting principles and to take a broader look at privacy writ large.”

We knew then where the Commission was heading and many in the industry mobilized to create the newly launched “Ad Choices” effort and the website: www.aboutads.info.

The advertising options icon is now embedded in millions of ads across the web, including those served up to consumers by the most popular search engines.  The effort was nearly two years in the making, and was launched only a week or so before the FTC’s staff report was issued.

Notably, the FTC’s chief criticism of the business community is that it has done too little, too late.  This assessment has to be more than a bit frustrating for those who were part of the self-regulatory effort. As it is newly launched, no-one has been able to collect metrics or study its efficacy yet, but the FTC is on to bigger things. Namely, promoting the creation of a national “Do Not Track” system, which unlike the self-regulatory effort would not be voluntary.

The day after the report was made public, the FTC was off to Capitol Hill to testify on the creation of a “Do Not Track” mechanism, which “would likely involve placing a setting similar to a persistent cookie on a consumer’s browser, and conveying that setting to sites that the browser visits, to signal whether or not the consumer wants to be tracked or receive targeted advertisements,” according to the testimony of David Vladeck, Director of the FTC’s Bureau of Consumer Protection.

Other witnesses on the panel testified about what consumers really want and expect in terms of online privacy. The testimony was mixed and contradictory with everyone involved articulating their own views on what consumers want and need.

It would likely take a legislative effort to make a national “Do Not Track” system a reality and to implement other suggestions made in the staff report (the topic of future blogs).

Until then, the newly launched self-regulatory effort will play out, and hopefully, through the metrics that will be collected, help all parties get a better sense of what consumers’ actual preferences really are.