Late Regulation

When your business is the gathering and sale of consumer information, you're bound to step into all sorts of privacy muck. A.C. Nielsen even goes as far as tracking traffic near outdoor advertising using a GPS-based device and satellites. Sounds like a big pile waiting to happen.

Multiple pending lawsuits threaten to limit industry activity as these issues turn into a battle over civil liberties. In addition, Congress is currently considering legislation which contains provisions designed to protect consumers from the manipulation of telephone Caller ID information or 'spoofing,' which is also an issue affecting Web pages ('phishing') and e-mails.

The Center for Digital Democracy executive director Jeff Chester maintains that the power to determine collection of data on the Internet, as well as via mobile phones and telephone Caller IDs, has to rest with the individual. "There need to be some rules, some safeguards, to protect the medium and its intrinsic democratic nature and to ensure that the public is protected," he said. "The Internet was established as an information vehicle [just as] radio was supposed to be the classroom of the air in the 1920s."

The same argument could be made for media industries using the Internet to harvest the information they broker. There are issues of liberty in limiting trade. The problem lies in the use of allegedly underhanded information-gathering techniques. According to the Federal Trade Commission (FTC), some Web sites imbed data-gathering cookies in users' computers without notifying them. The lack of notice of this and other data-harvesting practices is inflaming the privacy issue and encouraging a public backlash in the form of pending lawsuits and complaints against various media industries.

In 2006, AOL, in the name of academic research, posted more than 600,000 subscribers' searches on the Internet, jeopardizing their privacy. The posted information could be used by spammers and identity thieves. Several of the exposed users sued AOL, demanding that the company cease and desist saving search histories. However, without saving search histories, the search-engine industry, for example, loses out on market research.

As part of his 10-Point Plan for Media Democracy, Chester urges legislation that will require "affirmative consent" from a user before personal data can be collected. He feels that users should be conspicuously notified of data gathering, and of that data's intended uses. Media professionals must strategize for court decisions that will affect their business practices.

What can be done to prepare and deflect this growing vilification of data gathering? According to Bennet Kelley, founder of the Internet Law Center, the Web, specifically, is being denigrated as an open breach of public privacy, while 80 percent of privacy breaches are due to the government and brick and mortar retailers. "Why are we singling out e-commerce," he asked. "Data is collected everywhere. Supermarket scan cards, for example."

Privacy regulations are already in place that limit the scope of accepted data harvesting commerce. The Gramm-Leach-Bliley Act (GLB Act) prohibits financial institutions from disclosing credit card or transaction account numbers "for use in telemarketing, direct mail marketing, or other marketing through electronic mail to the consumer."

Mobile phone industry trade groups like the Mobile Marketing Association have been proactive in crafting their own industry guidelines, such as prohibiting third party sales of opt-in lists, to get a jump-start on guiding future legislation. As for upcoming legislation, Kelley predicts data breach and identity theft laws, as well as discussions about privacy in light of the Google-DoubleClick merger.

The FTC is steadily pursuing any companies it feels are violating section five of the FTC Act, which prohibits unfair or deceptive acts or practices in the marketplace. Upcoming decisions could alter the definition of "unfair or deceptive acts or practices in the marketplace" so that it means something very close to the data harvesting practices currently in use.

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