Commissioner Says FTC Is Not Ready to Advise on Do-Not-Track

ftc-roschFederal Trade Commission member J. Thomas Rosch expressed skepticism about self-regulatory initiatives and said the agency is not yet ready to endorse a do-not-track mechanism or advise Congress on privacy legislation.

Rosch, a Republican appointed by President George W. Bush, spoke yesterday at the Technology Policy Institute conference in Aspen, CO. As reported yesterday by CNET’s Declan McCullagh, the commissioner said the FTC should gather more information about tracking practices of ad networks and other online ad firms before endorsing a do-not-track mechanism, or anything else designed to help consumers protect their privacy online.

In a phone interview with ClickZ News later in the day, Rosch (left) indicated dissatisfaction with the ad industry’s self-regulatory approach to privacy. “Basically, I’m skeptical about self-regulatory initiatives, not only from an antitrust standpoint…I don’t think the self-regulatory process ought to be even potentially captive to large entities or firms” with vested interest in excluding competitors, he continued.

The ad industry’s most broad-reaching self-regulatory program, headed up by the Digital Advertising Alliance, approves for-profit companies to implement serving and tracking of its privacy icon in online ads. The DAA, a not-for-profit corporation, also charges fees for participation in the program that go toward operational and staffing costs.

Rosch’s speech given yesterday at the conference added new dimension to comments he made earlier this year in an Advertising Age opinion piece regarding do-not-track. His current approach would involve the FTC sending ad networks and other third-party ad firms requests “to answer under oath questions about their information practices” related to data “collection, use, sharing and retention.” The FTC would require approval from the U.S. Office of Management and Budget in order to send the requests, he noted in the speech, a copy of which was provided to ClickZ by the FTC.

The FTC would then categorize data practices to inform “white lists” and “black lists” which could then be used by browser-based do-not-track mechanisms, according to the ideas presented by Rosch.

Based on the categories, he said, “instead of relying on third parties, the FTC could design disclosures and other consumer education materials in order to enable consumers to make fully-informed decisions when they select a Do Not Track option. We are the experts when it comes to determining what constitutes full and complete disclosure, and we will have the benefit of having collected the underlying information from the advertising networks.”

He continued in the speech, “[The FTC is] in no position to advise Congress on legislation or engage in crafting self-regulatory guidelines unless we are in possession of reliable information of this kind.”

In his talk with ClickZ, he explained, “All of the points that are made in these current remarks were in response basically to my rethinking how this would work and what we would have to do to make it work.”

Rosch also indicated in his speech that the level of consumer concern about data tracking and use remains unclear, stating, “the information we at the FTC (Staff as well as Commissioners) have is based on imperfect consumer surveys and the preconceived notions of interested industries or consumer groups.” For instance, he said consumers may be more comfortable with collection and use of non-personally identifiable data for ad frequency-capping, but not for other purposes.

He added, “I am referring also to consumers being fully informed about the consequences of the choices they make, then afterward being given the chance to opt out or opt in. That is why I am frustrated by the current debate about privacy and behavioral tracking.”

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