Congress To Grill Web Companies Thursday

Congress is set to hold yet another hearing Thursday on behavioral targeting and privacy, marking the second time this year -- and at least the fifth since last summer -- that federal lawmakers are tackling the topic.

This week's hearing will focus on Web companies like Google, Yahoo and Facebook that target via cookies. In April, the spotlight was Internet service providers, who can only target ads by employing deep packet inspection to determine which sites users are visiting.

Rep. Rick Boucher (D-Va.) is widely expected to introduce new privacy legislation soon, but nothing is on the table as of today. Still, industry insiders are speculating that new legislation might require Web companies to obtain consumers' explicit opt-in consent before tracking them online and serving targeted ads.

If Congress is leaning in that direction, it would mark a big shift in sentiment from last year, when some leading policymakers said that ISP-based targeting should require opt-in consent, but that cookie-based targeting requires only opt-out consent.

It would mark a shift even from two months ago, when it appeared that Democrats were supporting opt-in consent for ISP-based targeting but opt-out consent for cookie-based targeting. A Republican briefing memo prepared in advance of that hearing and obtained by MediaPost argued against that position: "Internet privacy models that focus on a particular technology or corporate structure ... will merely insulate companies such as Google, Yahoo, and Microsoft from scrutiny while protecting their dominance," states the April memo.

Yet, there are valid reasons to differentiate between ISP-based targeting and cookie-based targeting. First, Internet service providers have access to all activity, including search queries and visits to non-commercial sites. Older companies only track people within a limited number of sites.

Additionally, users have a lot more control over cookie-based targeting. People can set their browsers to reject certain cookies and also can delete cookies manually. Ad companies promise that they will allow people to opt out of ISP-based targeting as well, but telling users they can opt out -- or rather, that they can ask ad companies to exclude them -- is very different from enabling users to take matters into their own hands by rejecting cookies.

2 comments about "Congress To Grill Web Companies Thursday ".
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  1. Stephen Shearin from ionBurst Media, June 16, 2009 at 10:32 p.m.

    Ach. Not again. Not only is pixel targeting not an invasion of privacy, it enriches user experience. In multiple surveys, respondents have said they don't mind the advertising that is alllowing them to surf for free - they would just prefer it be appropriate to their interests. How else but through the lowly pixel will we give our audience what it asks for?

    Moreover, I fail to see the difference between that, and for example someone standing in a mall that can watch you go from shop to shop, observe your gender and dress, and then approach you from a kiosk. They actually know a great deal more, and in the same way you can say 'no thank you' to them, you can opt out of your cookies.

    Ignorance of how to do so is no excuse elsewhere in the universe. Congress would be better off educating the public on how to 'opt out' if they are so concerned.

    This is nothing more than political grandstanding, and it threatens our industry unnecessarily. I hope when the time comes there is a very vocal group in opposition.

  2. Jeffrey Chester from CDD, June 17, 2009 at 2:08 p.m.

    I disagree with your premise that policymakers should differentiate between ISP and cookie-based targeting. As you and your readers should know well, online marketing data collection practices don't rely just on cookies and IP addresses. There's a wide range of data collection-related applications across platform (inc. rich media) that add to the profiling mix. (Nor should we expect people to reject cookies, placing the burden on consumers, etc). Both the ISPs and the major online marketing companies will engage in the same range of practices. That's why it's a major step forward Congress is looking into the overall digital marketing system. But I do also agree that ISP tracking and targeting, using deep packet inspection and other means, is a very disturbing prospect. We would prefer if ISPs were kept out of the online ad business--but that's not likely. Therefore, we need serious consumer safeguards for all of online marketing--full opt-in, consumer control, meaningful transparency, limited data collection, and even stronger policies for financial, health, and data collected from children & adolescents.

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