FTC To Recommend Self-Regulation, Not New Laws, Says Commission Member

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The Federal Trade Commission's upcoming report about behavioral advertising will include suggestions for how online ad companies can better protect consumers' privacy, but won't recommend that Congress enact new laws, commission member Julie Brill said on Tuesday.

"The Commission isn't calling for regulation right now," she said in a speech Tuesday at a privacy conference held by the law firm Proskauer. "We're talking about a new self-regulatory framework."

Brill elaborated that the behavioral targeting industry should improve its privacy efforts in several key areas. Among others, she said that companies should provide consistent and simplified notice about online tracking and ad-serving when the data is collected or used. She also said she would like to see notices focus on the unexpected uses of data, as opposed to obvious ones -- such as an ecommerce company's transfer of consumers' addresses to a shipping company.

In response to a question from the audience about whether the FTC was calling for a behavioral-targeting "Schumer box" -- or the box (named for New York lawmaker Chuck Schumer) that appears in credit card mailings and has information about the cards' terms -- Brill replied that a Schumer box, as well as nutritional labels, demonstrates the type of consistent notice the FTC supports.

Brill also said she personally would like to see the development of a do-not-track mechanism. Earlier this year, FTC Chair Jon Leibowitz told Congress that the commission was considering proposing the creation of a do-not-track mechanism that would allow consumers to easily opt out of all behavioral targeting.

While Brill said she was "encouraged" by the industry's recent moves forward with a self-regulatory program, she added that the FTC intends to assess the initiative after the compliance portion of the program launches. The agency will examine whether consumers can easily understand and use the opt-out mechanisms, whether there is a robust enforcement mechanism and the breadth of industry participation, Brill said.

Brill also distanced herself from the FTC's previous approach toward privacy, which focused on tangible harm to consumers -- such as identity theft. That model, she said, "may not adequately address other less quantifiable harms, which are nonetheless real," such as those that result from disclosure of information like medical conditions or sexual orientation.

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