FTC's Ohlhausen Questions Privacy Recommendations

Maureen-K.-OhlhausenThe Federal Trade Commission's 2012 privacy recommendations could unintentionally disadvantage smaller online ad companies, Commissioner Maureen Ohlhausen suggested on Tuesday.

Speaking at a conference of the trade group Network Advertising Initiative, she said the FTC “did not address the possible competitive effects of its recommendation” in the privacy report. That report, issued before she was sworn in, called on the ad industry to develop a universal do-not-track tool that will allow consumers to easily opt out of all online behavioral advertising. “New privacy restrictions may have an effect on competition by favoring entrenched entities that already have information, over new entities,” she said.

She added: “A policy that limits the ability of advertisers to access new information, to reach consumers, can have unintended effects in the marketplace.”

Some third-party ad networks have raised similar concerns, arguing that policies that prevent them from collecting information could disadvantage them against companies that collect information in their capacity as “first parties,” such as Amazon. In general, companies that operate sites visited by consumers are considered first parties, while ad networks that collect data at those sites are considered third parties.

But some first parties, like Amazon, are now operating their own ad networks, raising questions about what standards should apply when they collect information in order to send people targeted ads.

Ohlhausen also said she disagrees with the agency's 2012 recommendation that Congress consider enacting a baseline privacy law. “I don't currently support a baseline privacy bill, but am not against privacy legislation per se,” she said. She added that she supports the online ad industry's efforts at self-regulation, as a means of protecting consumers' privacy. “A voluntary self-regulatory process should operate without undue government involvement,” she said.

At the same time, Ohlhausen indicated that some current data-gathering practices could pose problems. “The ease with which companies can collect and combine info about consumers online has raised concerns,” she said.

She indicated that at least some of those concerns could be alleviated if companies compete to offer better privacy protections. “Consumers who wish for a higher standard ... can seek out other businesses,” she said. For example, the search company Duck Duck Go “offers consumers the ability to search the Web anonymously.”

Ohlhausen added that the FTC is “closely monitoring” the efforts of the Internet standards group World Wide Web Consortium to reach a consensus for how to respond to do-not-track signals sent by browsers.

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