Self-Reg Group Considers Adding Rules to Appease FTC

The online ad industry’s self-regulatory program could allow some companies to continue tracking consumers even when they’ve opted out through the system. Also, the Digital Advertising Alliance, the umbrella group leading the industry initiative, is considering expanding its requirements to prevent usage of data for health insurance eligibility or other controversial purposes.

Both FTC Chairman Jon Leibowitz and the commission’s Bureau of Consumer Protection director David Vladeck have recently affirmed concerns about online data tracking and usage. Alluding to the alliance’s behavioral advertising opt-out program, Leibowitz told Advertising Age last week, “We’d like to see them ramped up with a workable and successful program that will let consumers block the tracking, and not just the delivering of the ads. And with all deliberate speed.”

A concern within the agency and among privacy advocates is that data collected by third-party companies for ad targeting could be put to use in more nefarious ways.

Vladeck reiterated the point during a speech given at the 4A’s Transformation 2011 Conference held March 8. A “Do Not Track mechanism must allow consumers to opt out not only from the use of tracked data, but also from its collection…. Until we get the answer to our questions about secondary uses, we can’t support a Do Not Track mechanism that opts consumers out of targeted advertising but allows data to be used for other purposes,” he stated.

For instance, Vladeck suggested that data could eventually be shared with a health insurance company to determine policy eligibility or with potential employers. “Is the fact that I’m buying a deep fryer being shared with my health insurance company?” he asked. “When I visit websites on depression so I can help a friend who is feeling down, will my browsing activity be shared with potential employers?”

Recognizing the FTC’s focus on the program’s capabilities in regards to these nuances, the self-regulatory collective is “working on further guidelines to be very clear about that,” said Stu Ingis, a partner at Venable, a law firm working with the industry coalition. “What we’ve committed to do is work on sensitive areas more broadly,” he added. “We’re literally working through that.”

Ingis said he believes companies participating in the self-regulatory program agree with the FTC that data collected for advertising or analytics “shouldn’t be used for eligibility [related purposes].”

Yet, he stressed he hasn’t seen companies collecting data for ad targeting actually use that data or sell it for such purposes. “As a theoretical matter that’s a concern; as a practical matter we haven’t seen that [happening],” Ingis said.

As it exists currently, the self-regulatory program overseen by the alliance allows consumers to opt out from data collection and use for behavioral advertising, explained Ingis. If data is only being collected for behavioral advertising, it will no longer be collected from those who opt out using the program. However, when companies involved with the program also use data for additional purposes such as analytics, they may continue tracking and collecting data from people who have opted out through the program – even though those who have opted-out will no longer receive behaviorally targeted ads.