Three consumer advocacy groups are urging the Federal Trade Commission to investigate the online data-collection activities of Google, Microsoft, Yahoo and other companies that engage in real-time advertising auctions and data exchanges. The U.S. Public Interest Research Group (PIRG), the Center for Digital Democracy (CDD), and the World Privacy Forum believe an FTC investigation is warranted to counter what they characterize as growing consumer privacy threats.
Technologies that enable the real-time profiling, targeting and auctioning of consumer data are becoming commonplace as companies incorporate an array of outside data sources for sale online, warned PIRG's Ed Mierzwinski. "In just the last few years, a growing and barely regulated network of sellers and marketers has gained massive information advantages over consumers," he said.
Stealth Data Collection
Companies engaged in online profiling and behavioral targeting are employing practices that fail either to protect consumer privacy or provide for reasonable understanding of the data-collection process, including significant variations in how cookies are stored and the outside data sources used, the groups noted. Other practices include the instantaneous sale and trading of individual users without their permission or awareness, they wrote.
"Consumers will be most shocked to learn that companies are instantaneously combining the details of their online lives with information from previously unconnected offline databases without their knowledge, let alone consent," Mierzwinski said.
The groups characterize this system as a "massive stealth data-collection apparatus" that poses a significant threat to user privacy. "It also robs individual users of the ability to reap the financial benefits of their own data -- while publishers, ad exchangers, and information brokers" "cash in on this information," the consumer watchdogs observed.
U.S. consumers, especially during this time of economic hardship, need a commission that is proactive in protecting their interests, said CDD Executive Director Jeff Chester.
"FTC inaction has encouraged the data-collection and ad-targeting industry to expand the use of consumer information for personalized advertising," Chester said. "The commission's failure to adequately protect the privacy of consumer transactions online -- including those that involve financial and other sensitive information -- is irresponsible."
Targeting Consumer Health
Ad targeting involves many sensitive areas that require scrutiny -- including medications and health services, the FTC complaint asserted. "For example, Google's DoubleClick Ad Exchange permits the targeting of a wide range of health and financial behaviors," the filers observed. "These include arthritis, diabetes, GERD and digestive disorders, migraines, sleep disorders, pain management, credit cards, loans and insurance."
According to Privacy Choice, any site in Google's vast AdSense network may carry ads placed by third-party ad companies, which Google calls "certified ad networks," the filing noted. "This is an important privacy development, as it means that more than 80 new companies may now use or collect user behavioral information through Google ad tags that are already installed on millions of web pages."
The watchdogs are urging the FTC to adopt regulations that require companies involved in real-time online tracking and auction bidding to provide an opt-in mechanism for consumer participation. They also want the FTC to require these companies to modify their privacy policies and practices "to acknowledge that their tracking and real-time auctioning of users involve personally identifiable information."
What's more, the groups believe that consumers ought to receive fair financial compensation for the use of their data. Additionally, they want the FTC to prepare a report that informs consumers and policy-makers in Congress about the privacy risks and consumer-protection issues involved.