FTC Grapples With Privacy At Roundtable With Industry Professionals, Privacy Advocates, Academics

Pamela Jones Harbour

Federal Trade Commission member Pamela Jones Harbour on Monday called for a sweeping law to address both online and offline data collection.

"The United States needs comprehensive privacy legislation," Harbour said at an FTC roundtable on privacy.

"Behavioral targeting represents just one aspect of a multifaceted privacy conundrum," added Harbour, who is slated to soon leave the commission. "We have entered a digital arms race, if you will, and the outlook is troubling."

At Monday's roundtable -- the first of three scheduled by the FTC -- approximately three dozen industry executives, privacy advocates and academics addressed a host of issues surrounding data collection, including the role of online behavioral targeting in financing journalism, whether standards should be different for "sensitive" information, and how companies are notifying consumers about ad targeting.

Berin Szoka, director of the Center for Internet Freedom at the industry-funded think tank Progress & Freedom Foundation, called online behavioral targeting "a necessity" for sites that can't easily run contextual ads pegged to a page's content -- especially news sites.

Dave Morgan, founder of the behavioral targeting company Tacoda, added that news sites are particularly hard to monetize because marketers tend to view the prospect of surrounding news with ads as "a little scary."

"It could be a plane crash -- could be a murder," said Morgan, currently the CEO of Simulmedia.

When asked how much revenue behavioral targeting accounts for, Szoka estimated that in a "narrow" sense, such targeting probably came to around $1 billion of the industry's $23 billion total. That estimate is based on the definition of behavioral advertising as tracking people online to determine their interests and then serving targeted ads based on the sites' visited.

But Omar Tawakol, CEO of behavioral targeting company BlueKai, said if the definition was broadened to include techniques like frequency capping, then the technique played a role in the majority of online advertising.

Monday morning, a few hours before the FTC discussions got underway, Yahoo joined Google and BlueKai in offering users a tool to view and edit the ad categories associated with their computers.

David Vladeck, the head of the FTC's consumer protection bureau, praised the initiative but also lamented that the new tools have not yet been widely used by consumers. "There's work to do, as consumers are not clicking through to these pages in large numbers," he said.

Google's Alan Davidson, a policy director at the company, estimated that only "tens of thousands" of Google's users had visited its tool.

Meanwhile, BlueKai's Tawakol cautioned that this type of initiative could pose its own set of problems. "What if 55, or 5,500, companies have these tools? How will consumers know about them?" he asked.

A few speakers also questioned Web companies' use of Flash cookies to recreate HTTP cookies that consumers had deleted. Flash cookies are stored in a different place in the browser than HTTP cookies, which means that users who use browser controls to delete cookies aren't getting rid of the Flash cookies.

Harbour and Vladeck both said they were concerned that Web companies were circumventing consumers' preferences by using technologies other than HTTP cookies to collect data.

Various speakers addressed whether data collection standards should be different for collecting "sensitive" data, but few agreed on how to define sensitive data, or how Web companies should handle it.

"Do you really want someone to know what potential disease you're researching?" Tawakol asked. "Or whether you like alcohol or gambling or porn?"

The FTC's Peder Magee added that the use of Rogaine to treat hair loss might not be sensitive to one of his friends, but would be very sensitive to that friend's grandmother.

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