Citing concerns about the
digital marketplace, a coalition of privacy advocates and consumer groups are asking newly appointed Federal Trade Commission chair Jon Leibowitz to name a director of consumer protection with "a
track record as a genuine champion of consumer rights."
"The mandate of the Bureau of Consumer Protection is extraordinarily broad, covering everything from advertising and
marketing practices to financial services to privacy and identity protection," states the letter, dated Monday. "All those areas of concern have taken on new importance in the rapidly expanding
digital marketplace, where the traditional assurances of security and trust that consumers have come to expect from bricks-and-mortar establishments often do not exist online."
Former Consumer
Protection chief Lydia Parnes left the FTC in January to join the Washington branch of Wilson Sonsini Goodrich & Rosati--a Silicon Valley law firm that represents Google on many matters.
Signatories to Monday's letter include the Center for Digital Democracy, Center for Science in the Public Interest, Consumers Union, Electronic Privacy Information Center, Privacy Times and
U.S. Public Interest Research Group.
"We're sending a signal to the FTC that the sleepy, head-in-the-sand approach of the Bush years is no longer acceptable," said Jeff Chester, executive
director of the Center for Digital Democracy. Chester added that he hopes the FTC named someone "ahead of the curve when it comes to new media, marketing and privacy."
The Interactive Advertising
Bureau's Mike Zaneis, vice president for public policy, took issue with the advocates' assertion about the digital marketplace. "Any group claiming that traditional assurances of security and trust do
not currently exist online are mischaracterizing the online ecosystem and must be bereft of the expertise to provide useful input into this tremendously important appointment," Zaneis wrote in an
email to Online Media Daily. He added that the IAB believes Leibowitz "will name someone who takes the title of "Consumer Protection" as seriously as past chiefs have."
Chester's
organization and the U.S. Public Interest Research Group complained to the FTC about behavioral targeting in November 2006, spurring the agency to investigate whether certain Web marketing practices
violate Web users' privacy. Last month, the FTC issued proposed self-regulatory guidelines for behavioral advertising, or tracking people online anonymously and serving them ads based on sites
visited. Those principles call for companies to notify consumers about behavioral targeting and allow them to opt out.
At the time, Leibowitz wrote in a separate concurrence that the industry
"needs to do a better job of meaningful, rigorous self-regulation or it will certainly invite legislation by Congress and a more regulatory approach by our Commission."
Chester said that consumer
groups intend to continue pressing the agency about online privacy and marketing.
Separately, some observers are predicting that privacy will play a major role in policy decisions. Influential
financial services firm Stifel Nicolaus called online privacy the "biggest sleeper policy" issue facing the communications industry.
"We see increased controversy and potential for either
government regulation or increased industry 'self-regulation,' " states the Stifel Nicolaus report, authored by analyst Blair Levin, who co-chaired President Barack Obama's transition team's tech
policy group. "It is not clear new laws will be adopted restricting the ability to precisely target Internet advertising, but the government focus creates a risk factor."
The 22-page paper also
predicts that network operators will gradually ramp up controversial efforts to serve targeted ads, generating privacy concerns as well as economic battles between different players involved in online
media. "While there are significant consumer interests involved, the key economic battle is between the broadband networks and the Internet content and application providers, particularly the search
engines, over the rules for disclosure and permission."