FTC Blasted Over Privacy Report

Privacy watchdogs are blasting the Federal Trade Commission's recent privacy report, which appears to oppose the proposition that companies should obtain consumers' opt-in consent before tracking their online activity in order to send them targeted ads.

Earlier this month, the FTC said in a staff report submitted to the National Telecommunications and Information Administration that an opt-in regime for online tracking would likely lead to the loss of ad-funded content. The agency cited a 2013 study by the ad industry group Digital Advertising Alliance for that proposition -- even though that study focused on consumers' attitudes toward the internet, as opposed to whether online tracking fueled free content.

This week, a coalition of civil rights groups and consumer advocates wrote to FTC Chairman Joseph Simons to express their “disappointment” with the staff report.

“We would have hoped that the FTC would take a broader look at the evidence, rather than relying on a self-serving study by one stakeholder,” the Center for Digital Democracy, Consumer Federation of America, Electronic Frontier Foundation and Electronic Privacy Information Center and 11 other organizations wrote.

They added that the 2013 DAA study referenced by the agency “fails to cite any empirical data suggesting that without targeted advertising, free online content will decrease.”

“The FTC’s stated position ignores the fact that contextual advertising, which does not raise the same privacy concerns as behavioral advertising, would still be possible,” the watchdogs add. “In addition, the FTC fails to recognize that placing the burden on individuals to deal with the privacy-intrusive nature of behavioral tracking and targeting is unfair.”

The FTC staff report -- one of the agency's first major statements on online privacy since a slate of new commissioners took over this year -- also endorsed a “balanced” approach that “weighs the risks of data misuse with the benefits of data to innovation and competition.”

The report went on to offer some specific examples of benefits to data collection, including “more relevant online experiences, as retailers provide customized offers and video services recommend new shows.”

But the advocates say these kinds of “benefits” should be offered on an opt-in basis.

“'More relevant online experiences' ... is something that consumers should be given the option to affirmatively agree to if they wish,” the groups write. “We do not think that 'more relevant' should be read to mean more beneficial to advertisers.”

Next story loading loading..