FTC Proposes 'Do Not Track' Option For Internet - InformationWeek

The Federal Trade Commission has made a potentially far-reaching proposal that would give web users the option of shielding personal information from advertisers, retailers and other companies while browsing the Internet.

The FTC gave its blessing to the so-called "Do Not Track" approach in a proposed framework for consumer privacy released Wednesday. The proposal would apply to all commercial organizations that collect or use data that can be linked to a specific consumer, computer or other device.

The commission favored giving consumers a simple mechanism for disallowing data gathering. To do that, the FTC recommended adding a button to browsers that would activate technology to prevent people from being tracked or receiving targeted advertising. The proposal would be an alternative to current browser privacy settings, which a recent study by Stanford University and Carnegie Mellon found inadequate to shield people's viewing habits.

The need for such simplicity stems from the fact that the voluntary approach -- in which organizations set their own privacy policies and notify consumers of the rules in advance of collecting information -- has failed. "Specifically, the notice-and-choice model, as implemented, has led to long, incomprehensible privacy policies that consumers typically do not read, let alone understand," the FTC report said.

The Future of Privacy Forum, a Washington, D.C.-based think tank, agreed with the FTC and praised the report. "Today's FTC report identifies the most pressing privacy issues facing consumers today," the group said in a statement. "They correctly recognize that the current framework needs to be updated to reflect consumers' ongoing concerns about how their data is being collected and used."

The commission's proposed privacy framework would have companies build consumer privacy protection into every stage of development of products and services. In addition, organizations would offer a clearly defined no-tracking option at the time a consumer is making a decision that would set data gathering in motion. Finally, companies would increase transparency of their data practices through clearer, shorter and more standardized privacy notices and by providing access to consumer data they maintain. If a company planned to use data for something other than its originally stated purpose, then consumers would have to agree to the new use in advance.

Advertisers have been adamantly against government-imposed privacy regulations, preferring a self-regulatory approach instead. In an appearance this year before the House Subcommittee on Commerce, Trade and Consumer Protection, Mike Zaneis, VP of public policy for the Interactive Advertising Bureau, argued that the industry "has a long and successful history of protecting consumers' privacy rights through effective self-regulation."

"Given the free content and services that consumers enjoy because of advertising revenue, it is imperative that any new laws be carefully tailored," Zaneis said.

Shar VanBoskirk, analyst for Forrester Research, said the firm's studies have shown that consumers are generally willing to share information with marketers if there's a valuable payback for doing so. Consumers are more concerned about the lack of control they have over their data, and VanBoskirk said she doesn't have a lot of faith that legislation would effectively address those concerns.

"Consumers need education to understand how their data is used, when data sharing has a benefit for them, where their data goes, who knows what about them, and then how to elect out of data sharing if they choose," VanBoskirk said in an e-mail sent to InformationWeek.

The FTC does not have the authority to require companies to follow its framework, much of which would require an act of Congress. The House Subcommittee on Commerce, Trade and Consumer Protection is scheduled to consider on Thursday the feasibility of a universal method for opting out of being tracked online, according to The New York Times.

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Agency Proposes 'Do Not Track' Option for Web Users - New York Times

The F.T.C.’s proposal, a broad framework for commercial use of consumer data, would encourage companies to promote consumer privacy when developing new products and services, among other provisions. Do-not-track controls would let Web users decide whether Internet sites and advertisers could collect information about their browsing and buying habits as well as other personal data.

The recommendations, in a report released by the commission that solicits public comment over the next two months, are based on the commission’s belief that current practices regarding privacy protection have not kept pace with the rapid growth of technology and new business models.

Industry self-regulation, the preferred model among advertising companies and many online retailers, has “failed to provide adequate and meaningful protection” for consumers, the report said.

Now, the trade commission hopes to adopt an approach that it calls “privacy by design,” where companies are required to build privacy protections into their everyday business practices. That approach would include retaining data on consumer preferences and online browsing activity only as long as needed and deleting data on a regular basis.

The report also recommends that companies adopt simpler, more transparent and streamlined ways of presenting consumers with their options rather than the “long, incomprehensible privacy policies that consumer typically do not read, let alone understand.” And the report recommends that data brokers give consumers “reasonable access” to whatever data they have collected.

While the report is critical of many current industry practices, the commission will probably need the help of Congress to enact some of its recommendations.

“I do not think that under the F.T.C.’s existing authority we could mandate unilaterally a system of ‘do not track,’ ” David Vladeck, the director of the commission’s bureau of consumer protection, said Wednesday at a conference sponsored by Consumer Watchdog, a nonprofit group.

“There are ways we could coax, cajole and charm industry in that direction,” Mr. Vladeck said. But, he added, “If the decision was made by Congress that ‘do not track’ should be put in place immediately, it would take an act of Congress.”

There is support in Congress for doing so, however, and the House Subcommittee on Commerce, Trade and Consumer Protection will take up the matter at a hearing Thursday that will examine the feasibility of creating a simple and universal method of opting-out of being tracked online.

Christopher Soghoian, a privacy and security researcher, said at the Consumer Watchdog conference that most consumers do not have privacy software and that the use of privacy options in most Internet browsers “doesn’t do much.”

Because many of the companies that make Web browsers are also supported by advertising networks, “the design decisions are motivated by a desire not to hurt their advertising divisions,” Mr. Soghoian said.

“The situation right now is laughable,” he added. “There certainly isn’t a single one-stop shop.”

Edward Wyatt reported from Washington and Tanzina Vega from New York.

This article has been revised to reflect the following correction:

Correction: December 1, 2010

An earlier version of this article misspelled David Vladeck's name as Vladek.

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