FTC Forum Promises Discussion of More than Just Behavioral

As the Federal Trade Commission kicks off its highly anticipated public Town Hall forum on digital advertising tracking, targeting and technologies, industry players and consumer privacy watchdogs are doing all they can to ensure the commission takes their views into consideration. From consumer education efforts to concerns about racial profiling, the next two days promise to squeeze in an array of topics with one thing in common: digital consumer data.

Over the next two days, representatives of companies including Facebook and Yahoo, advocacy groups such as World Privacy Forum and trade organizations like the Interactive Advertising Bureau will convene in Washington, D.C., for the event. The FTC’s discussion agenda will cover data usage and protection, privacy disclosure, industry self-regulation, and most dominant in the schedule, behavioral targeting. Despite what’s planned, Google’s still-proposed acquisition of DoubleClick and the data-driven lead generation industry, both currently being inspected by the FTC, will most likely be debated.

In a 65-page draft statement expected to be submitted to the FTC today, the Center for Digital Democracy and U.S. Public Interest Research Group make a far-reaching appeal for more stringent regulation of user tracking, data mining and behavioral targeting, suggesting the “online advertising industry continues to run roughshod over basic privacy rights” in these and other areas.

One point of contention appears to be the cute names marketers give to audience segments, such as “Shopaholics” and “Lonely Hearts.” According to the report, the “often-flippant taxonomy…masks the crass, manipulative nature of such digital stereotyping.”

Other targets of the statement are Google’s proposed acquisition of DoubleClick, and the use of behavioral targeting in social sites frequented by youth. The paper also suggests the commission inspect the role of behavioral targeting and online ads in promoting subprime mortgages, and how marketers use “racial profiling and ethnic identification” to target ads.

In preparation for the conference, yesterday other consumer advocacy and privacy groups including the Center for Democracy and Technology, Consumer Federation of America and Electronic Frontier Foundation called on the commission to implement a “Do Not Track List.” They claim the Do Not Call-inspired list would afford consumers more control of their personal information gathered online.

The yet-to-be-created privacy guard is contingent upon nonexistent browser technologies and eventual industry compliance. It would operate by requiring companies that drop persistent tracking technologies on users’ computers (read: advertisers, agencies, ad networks, site publishers and third-party technology firms) to register all domains of servers placing those technologies, typically cookies, on users’ computers.

“We need real browser controls and the browser companies would need to look at that,” CDT Deputy Director Ari Schwartz told ClickZ News.

A current solution enabled by industry trade group Network Advertising Initiative, maligned by some privacy advocates, is ineffective, said Schwartz. The NAI tool allows consumers to easily opt-out of targeted ads delivered by its member ad networks, but not all companies tracking or using their data; Schwartz believes consumers should be able to opt-out of being tracked through one system.

The CDT and friends also want the FTC to settle on a new definition for personally identifiable information (PII). Not surprising, the CDT has something in mind already. In part, it would define PII as anything that permits “a set of behaviors or actions to be consistently associated with a particular individual or computer user, even if the individual or computer user is never identified by name or other individual identifier.”

If established as the standard, the definition could lodge a stick in the spokes of the behavioral targeting industry. For years, behavioral targeting tech firms have insisted their systems store and aggregate only non-personally identifiable information, but many privacy guardians are skeptical of this claim, and are increasingly leery of data users skirting privacy policies by pairing non-PII with PII harvested separately.

“It’s hard to say what companies out there use as their internal definition of personally identifiable data,” said Schwartz. The CDT and its fellow petitioners also want companies to let users access their personal tracking data, and call for restrictions on gathering sensitive health or financial data online.

Some in the ad industry have often argued consumer education is what’s needed. With this in mind, AOL announced yesterday it will expand a consumer awareness ad campaign begun last year and introduce a Web cache-based opt-out system that doesn’t employ cookies. This would allow users to remain opted-out of Tacoda’s behavioral targeting even if they delete their browser cookies. Tacoda and AOL will be represented at the FTC event.

Consumer advocates including the CDD also are worried online and offline data could be paired. In its statement to the FTC, the group pointed out offline data behemoth Acxiom as a potential infringer of consumer privacy by combining data sets. Acxiom recently introduced a behavioral targeting product and yesterday announced it planned to expand its online and offline products to better serve mid-tier marketing services firms.

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