FTC To Examine Privacy Policies, AdChoices Icon

The Federal Trade Commission plans to scrutinize online privacy notifications, the agency announced this week.

"Disclosures are ... challenging in the privacy arena, whether disclosing to consumers that their physical location or online interactions are being tracked, or explaining privacy practices when consumers sign up for a service," the FTC stated.

The agency intends to examine written privacy policies as well as the centerpiece of the ad industry's self-regulatory privacy code -- the AdChoices icon.

"Privacy policies are often long and difficult to comprehend and privacy-related icons may fail to communicate information meaningfully to consumers," the FTC said in a post announcing an upcoming workshop on the topic. "Furthermore, the accompanying mechanisms for consumers to provide informed consent or exercise choices about the use of their data may also be confusing."

That AdChoices icon, a small blue symbol in the shape of a sideways triangle -- is supposed to function as an immediately recognizable symbol of online behavioral advertising. That is, it's supposed to inform people that advertisers are drawing on consumers' Web-surfing history in order to serve them targeted ads. Clicking on the icon also takes people to pages where they can learn more about behavioral targeting and also opt out of receiving targeted ads.

While advertisers, agencies and publishers serve the AdChoices icon more than 1 trillion times each month, fewer than one in 10 Internet users know what it means, according to a 2015 report by the agency Kelly Scott Madison.

Privacy policies have long been a focus for Lorrie Faith Cranor, who currently serves as chief technologist for the FTC. Eight years ago, Cranor authored a report concluding that online privacy policies take users an average of 10 minutes to read. Cranor, who now serves as chief technologist for the Federal Trade Commission, concluded that if every Web user in the country read the policy at every site visited, time spent reading privacy policies would total an estimated 44.3 billion hours per year.

Since then, the ad tech landscape has only become more complex, making it even harder for Web companies to accurately explain their practices regarding data.

As things stand, although commercial sites tend to have privacy policies, consumers don't appear to have the slightest idea what they mean. The University of Pennsylvania's Joe Turow, who studies consumers' attitudes toward privacy, told the Pew Research Center in 2014 that privacy policies tend to be unreadable. "They are filled with jargon that is meant to be understandable only to the people writing them, or to people who work in the advertising industry today," he said. "Words like ‘affiliate’: nobody outside of the digital marketing industry knows what that means.”

In 2014, Pew reported that 52% of Americans mistakenly think the following statement is true: “When a company posts a privacy policy, it ensures that the company keeps confidential all the information it collects on users.”

Only 44% of Americans said that statement was false.

"It is clear that there is deeply embedded and long-standing confusion among consumers when it comes to privacy policies and the protections they afford," Pew wrote.

The FTC's workshop will take place on Sept. 15.

2 comments about "FTC To Examine Privacy Policies, AdChoices Icon".
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  1. Lou Mastria from Digital Advertising Alliance, May 26, 2016 at 3:49 p.m.

    Unfortunately, the DAA was not contacted for this article before it ran, as we believe it unfairly represents the level of consumer awareness around the YourAdChoices icon. The Kelly Scott Madison survey cited in the piece was released a full year ago, in May of 2015, while more recent data showing continued growth in public awareness of the icon was ignored. 

    TRUSTe, released a survey ( earlier this month showing that consumer awareness of the YourAdChoices icon has doubled over the last two years from 21% in 2014 to 42% today. Given that the program is only five years old, it is clear that the program has reached a very high level of public awareness in a short amount of time, and we are continuing to build on that awareness with an expanded PSA campaign launched earlier this year.

    We look forward to continuing to share information about the success of the DAA's self-regulatory efforts with the FTC and other policymakers, as we work together to offer consumers information and control around the types of advertising they receive.

  2. Julie Ford from Digital Advertising Alliance of Canada, June 8, 2016 at 11:21 a.m.

    Privacy policies are certianly an area in need of assistance, we all know this. Discussion and guidance may help.

    Thank you for mentioning the AdChoices program, but I have to agree with Lou that this article seems to skew against the program.

    The self-reg is an endevour that needs industry acceptance and support from all areas. There are privacy laws here in Canada that companies need to address, and the AdChoices program can help these companies comply with the requirements. I believe consumer awareness will increase with concerted industry effort - all of us working together to educate.

    Here at the DAAC, we've conducted some research recently that shows Canadian awareness about the AdChoices program is growing, which we will release soon. But garnering nationwide, global, attention and understanding about the program will take many years to accomplish. Coca-Cola wasn't built in a day.

    In the meantime, here are some links to help readers understand more:

    US consumer page:
    Canadian consumer page:
    EU consumer page:

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