The Federal Trade Commission's final report on online privacy, released Monday, could have a major impact on how advertising and other user-based activities work on the Web. The first wave of reaction to this potentially groundbreaking initiative features largely cautious support from consumer and privacy groups, as well as criticism from some industry organizations.
The report, a final version of a preliminary one released in December 2010, calls on Congress to pass "baseline privacy legislation" that will protect personal data to a greater extent than it is now. The specific recommendations include support for the "Do Not Track" browser header, stronger federal legislation, and protections governing online data brokers.
'Creates Strong Guidelines'
Among other things, the report proposes that consumers be able to opt out of user tracking, similar to the current "Do Not Call" registry for phone solicitations. It also calls for "short, meaningful disclosures" that would allow customers to have more information about the data being collected about them.
The Electronic Frontier Foundation, a leading advocate for online privacy, said in a statement that the report "creates strong guidelines for protecting consumer privacy choices in the online world." It also noted that the FTC acknowledged "important steps" taken by industry consortia like the Digital Advertising Alliance, as well as the World Wide Web Consortium's effort to create standards to govern user tracking.
Some industry observers have criticized the voluntary approach exemplified by the DAA, in part because only a portion of the ad industry are members of the organization and subscribe to its guidelines.
The EFF voiced a note of caution that some efforts could be focused more on Do Not Target, rather than the larger Do Not Track. The distinction, also raised in a dissenting opinion by FTC Commissioner J. Thomas Rosch, is between a company serving targeted ads, and a wider collection of consumer behavioral data.
'Trade-Offs and Costs'
Similarly, the Consumers Union, which is the policy and advocacy division of the non-profit Consumer Reports publication, also praised the FTC report. The organization's regulatory counsel, Ioana Rusu, said in a statement that it was "a good report that reflects the growing concerns about online privacy" and that addresses the need for better tools and information to decide how personal data is used.
However, the Electronic Privacy Information Center, or EPIC, warned that the FTC's proposed framework "is not as extensive" as the Consumer Privacy Bill of Rights proposed by the White House, and that much of the FTC's protections rely on self-regulation by industry.
By contrast, the Information Technology and Innovation Foundation, an industry organization, said the recommendations seek "to protect consumer privacy by imposing new reporting requirements on businesses, restricting online advertising, and stifling innovation in the mobile market."
It acknowledged that consumers "should have options to protect their privacy," but contended that there are "important trade-offs and costs" involved in creating and managing those protections.
The Direct Marketing Association told news media that, while data should not "be used for non-marketing purposes," there are already laws to prevent that from happening. The organization is backing a voluntary, self-regulatory approach, and said there is no harm in companies providing customized information to their customers.