To address important consumer privacy concerns associated with online behavioral advertising, the staff of the Federal Trade Commission today released a set of proposed principles to guide the development of self-regulation in this evolving area. Behavioral advertising is the tracking of a consumer’s activities online – including the searches the consumer has conducted, the Web pages visited, and the content viewed – in order to deliver advertising targeted to the individual consumer’s interests.
For more than a decade, the FTC has engaged in investigation, law enforcement, studies, and other privacy developments to protect consumers’ privacy online. Concepts used to develop the principles emerged from the agency’s longstanding privacy program and, more recently, from two conferences hosted by the FTC. In the fall of 2006, a three-day public hearing, “Protecting Consumers in the Next Tech-ade,” examined technology developments that could raise consumer protection policy issues, including privacy, over the next decade. This past November, building on the Tech-ade hearings, the FTC hosted a Town Hall entitled “Ehavioral Advertising: Tracking, Targeting, and Technology,” to focus in on privacy issues raised by behavioral advertising.
“The purpose of this proposal is to encourage more meaningful and enforceable self-regulation to address the privacy concerns raised with respect to behavioral advertising. In developing the principles, FTC staff was mindful of the need to maintain vigorous competition in online advertising as well as the importance of accommodating the wide variety of business models that exist in this area,” according to its proposal “Behavioral Advertising: Moving the Discussion Forward to Possible Self-Regulatory Principles.” The proposal states that behavioral advertising provides benefits to consumers in the form of free content and personalized advertising but notes that this practice is largely invisible and unknown to consumers.
To address the need for greater transparency and consumer control regarding privacy issues raised by behavioral advertising, the FTC staff proposes:
To address the concern that data collected for behavioral advertising may find its way into the hands of criminals or other wrongdoers, and concerns about the length of time companies are retaining consumer data, the FTC staff proposes:
To address the concern that sensitive data – medical information or children’s activities online, for example – may be used in behavioral advertising, FTC staff proposes:
The staff is seeking additional information about whether tracking data is being used for purposes other than behavioral advertising and whether such secondary uses, if they occur, merit some form of heightened protection.
Because online advertising supports free Web content and other benefits, the choice by consumers not to participate in behavioral advertising could reduce the availability of these benefits. The FTC is seeking comments from all interested parties on the proposed principles, including the costs and benefits of offering choice for behavioral advertising. Comments can be sent to BehavioralMarketingPrinciples@ftc.gov.
The Commission vote approving issuance of the principles was 5-0.
Copies of “Behavioral Advertising, Moving the Discussion Forward to Possible Self-Regulatory Principles,” can be found at the following URL: http://www.ftc.gov/os/2007/12/P859900stmt.pdf. The FTC works for the consumer to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. To file a complaint in English or Spanish, click http://www.ftc.gov/ftc/complaint.shtm or call 1-877-382-4357. The FTC enters Internet, telemarketing, identity theft, and other fraud-related complaints into Consumer Sentinel, a secure, online database available to more than 1,600 civil and criminal law enforcement agencies in the U.S. and abroad. For free information on a variety of consumer topics, click http://www.ftc.gov/bcp/consumer.shtm.