Watchdogs Ask FTC To Probe 'Behavioral Targeting On Steroids'
- by Wendy Davis @wendyndavis, April 8, 2010
Advocates have filed other complaints about online behavioral advertising, or serving users ads based on sites visited, but they say that newer methods of ad targeting are especially problematic -- in part because of the extremely detailed user profiles that result from integrating online and offline information.
"It's behavioral targeting on steroids," says Jeff Chester, CDD's executive director. "Online marketers have made what was science fiction in 'Minority Report' now a reality. They have created a stunning and impressive -- but deeply disturbing -- automated system that, while boosting revenues and efficiency, has very serious consequences to consumers."
The complaint alleges that the "massive and stealth data collection apparatus" threatens privacy and also "robs individual users of the ability to reap the financial benefits of their own data."
Joining CDD in the filing are the U.S. Public Interest Research Group and the World Privacy Forum. The groups are asking for a probe of a host of Web companies, including Microsoft, Google and Yahoo.
They are asking the FTC to require companies that are "involved in real-time online tracking and auction bidding, including providing related data optimization" to obtain consumers' opt-in consent.
"The online marketing industry has to begin paying attention to this notion of consumer empowerment," Chester says.
In addition, the groups argue that consumers should reap some financial reward when data about them is used to convince marketers to pay a premium for ads. "The availability of so-called free content is an insufficient return to a consumer for their loss of privacy, including their autonomy," they allege.
The online ad industry generally argues that targeting poses no privacy threat because companies don't know individuals' names or other identifying information. Also, they say, self-regulatory principles require companies to allow users to opt out of targeting.
But the advocates specifically challenge the idea that targeting is anonymous simply because marketers don't have so-called personally identifiable information. The groups point to a recent spate of deals, such as eXelate's arrangement to add Nielsen's PRIZM data to users' cookies, to show that companies are compiling far more detailed profiles than in the past.
"The incorporation of outside data, including behavioral information, on a single user or set of users, illustrates the need for the FTC to quickly clarify to marketers that they can no longer hide behind the flimsy excuse that targeting is ok because it isn't so-called personally identifiable," the complaint alleges.
In 2006, the CDD and U.S. Public Interest Research Group filed an FTC complaint that kicked off much of the current debate in Washington about behavioral targeting and privacy.
I find it curious that Mr. Chester thinks MORE data (all of which is non PII) results in a greater threat to consumers. 0+0 still equals 0. His perception is way out in front of reality on the use of data to target online ads.
This guy is nuts. I can send direct mail to people based on what I learn about them by pulling their credit history - including social security numbers (just like every financial services company on the planet) and he is worried about PRIZM cluster data being used on the web? And what about the notion that users should be financially compensated for being targeted by display ads on the web? Uhhh....missed that last commission check atop the stack of Capital One & AmeEx credit card solicitations I found in my mailbox when I got home last night. I sincerely hope folks from the DMA et al are out in force on this one.
Mark makes a good point, but some of the facts are overstated. I can not target you based on SSN and there are pretty stringent limits on what I can do with credit history (once upon a time you could, but that's been gone for a while with Gramm-Leach-Bliley in 1999). But, he's absolutely right about the fact that I can acquire full PII data on a host of personal behaviors to cram consumer mailboxes with all kinds of content and even backdoor into telemarketing around the do-not-call list. And, If I making a pre-approved offer of credit, I can access credit history, which is often a cover used in credit and auto marketing.
Compensating consumers for the value of their data, has been tried before in the offline world, and has gone nowhere.
I doubt that our government is going to shut down one of the fastest growing sectors of our economy with unemployment hovering at 10%