[Infowarrior] - Congress weighs landmark change in Web ad privacy

[Richard Forno]

Congress weighs landmark change in Web ad privacy
By JOELLE TESSLER
The Associated Press
Monday, September 7, 2009 10:15 AM

http://www.washingtonpost.com/wp-dyn/content/article/2009/09/07/AR2009090700604_pf.html
WASHINGTON -- The Web sites we visit, the online links we click, the  
search queries we conduct, the products we put in virtual shopping  
carts, the personal details we reveal on social networking pages - all  
of this can give companies insight into what Internet ads we might be  
interested in seeing.

But privacy watchdogs warn that too many people have no idea that  
Internet marketers are tracking their online habits and then mining  
that data to serve up targeted pitches - a practice known as  
behavioral advertising.

So Congress could be stepping in. Rep. Rick Boucher, D-Va., chairman  
of the House Energy and Commerce Subcommittee on Communications,  
Technology and the Internet, is drafting a bill that would impose  
broad new rules on Web sites and advertisers. His goal: to ensure that  
consumers know what information is being collected about them on the  
Web and how it is being used, and to give them control over that  
information.

While Congress has waded into Internet privacy issues before, this  
measure could break new ground, as the first major attempt to regulate  
a nascent but fast-growing industry that represents the future of  
advertising. Boucher insists his bill will benefit consumers and  
preserve the underlying economics of the Internet, which relies on  
advertising to keep so much online content free.

"Our goal is not to hinder online advertising," he said. "This will  
make people more likely to trust electronic commerce and the Internet."

Although his proposal is still taking shape, Boucher is confident  
lawmakers will pass an online marketing privacy law of some sort. He  
is working with Cliff Stearns of Florida, the top Republican on the  
Internet subcommittee, as well as Rep. Bobby Rush, D-Ill., who chairs  
a separate subcommittee on consumer protection.

Already, Washington's interest in Internet marketing has put online  
advertisers on notice. In July, the industry released a set of self- 
regulatory principles in an effort to head off concerns in Congress  
and the Federal Trade Commission. The FTC put out Internet ad  
guidelines early this year.

Boucher's efforts have encouraged privacy activists, who point out  
that Internet surveillance has evolved beyond just data-tracking  
files, known as cookies, that Web sites place on visitors' computers.  
Technologies such as "deep packet inspection" can now monitor a user's  
every online move.

"Consumers have no idea that they are being followed online and that  
their information is being compiled into invisible digital dossiers,"  
said Jeffrey Chester, executive director of the Center for Digital  
Democracy, one of 10 privacy groups that recently issued  
recommendations for lawmakers. "There is an incredibly sophisticated,  
ever-advancing system for profiling online users."

Chester believes several developments have put the issue on  
Washington's radar. Those include the rise of social networking sites  
that capture detailed personal information, like Facebook and MySpace;  
Google Inc.'s acquisition of the Internet ad service DoubleClick Inc.;  
and the proposed Internet search partnership between Microsoft Corp.  
and Yahoo Inc., now under review by the Justice Department.

"Online privacy has finally taken off and become a serious political  
issue," Chester said. "A perfect digital storm has created momentum  
toward action."

The challenge facing Washington, said Federal Trade Commission  
Chairman Jon Leibowitz, is to strike the right balance between  
"protecting the fundamental rights of consumers" and preserving  
"business equilibrium."

Boucher's bill will seek a middle ground in a long-running debate over  
what the default assumptions should be when companies monitor  
consumers' online interests.

On one side, privacy watchdogs say Web sites should be required to  
obtain user permission - that is, people would "opt in" - before  
collecting most data.

On the other side, Web sites and advertisers insist such a mandate  
would overwhelm consumers with privacy notices. The companies argue  
that it is more practical to simply allow people who do not want to be  
tracked to "opt out" of data collection.

Boucher expects to set different rules for different types of sites.  
Sites that collect visitor information in order to target advertising  
on their own pages, for instance, would have to offer consumers a  
chance to opt out of having their interests tracked. These sites would  
also be required to prominently disclose what information they collect  
and provide a detailed description of how that information is used.

Web sites that deal with sensitive personal information, such as  
medical and financial data, sexual orientation, Social Security  
numbers and other ID numbers, would have to ask users to opt in to  
being tracked.

Boucher's bill would not be the first significant online privacy law.  
In 1986, Congress passed the Electronic Communications Privacy Act,  
which placed privacy obligations on companies and organizations that  
offer e-mail services. The Children's Online Privacy Protection Act of  
1998 requires commercial Web sites targeted at children under age 13  
to obtain parental consent before collecting personally identifiable  
information.

But the current bill would mark the first significant attempt by  
Congress to regulate Internet advertising. Marc Rotenberg, executive  
director of the Electronic Privacy Information Center, said there had  
been little need for Congress to impose privacy protections on  
advertisers offline, since traditional media such as TV, radio and  
newspapers don't enable marketers to profile individual consumers as  
easily as the Internet does.

Now, Rotenberg said, "privacy laws should be updated to reflect new  
business practices."

It's too soon to know whether Boucher's final bill will go far enough  
to satisfy privacy activists. But they agree that a law would do much  
more than the self-regulatory principles released by the Interactive  
Advertising Bureau (IAB), the Association of National Advertisers  
(ANA) and three other advertising trade groups in July.

Among other things, those principles call for consumer education  
efforts and disclosure of behavioral advertising practices.

ANA Executive Vice President Dan Jaffe said self regulation is the  
best approach for managing an industry evolving as quickly as online  
advertising.

"Legislation would be too rigid because this is a moving target,"  
Jaffe said.

Mike Zaneis, IAB's vice president of public policy, added that self  
regulation is effective since it is in advertisers' interest to make  
sure consumers trust them.

"At the end of the day, the most important asset any online company  
has is a strong relationship with the consumer," he said.

Yet that's also why Chester insists that tougher rules from Congress  
would not cripple online advertising. Consumers might be more likely  
to favor Web sites that allow them to see and influence their personal  
data.

"It's about treating consumers with respect," said Joseph Turow, a  
professor at the University of Pennsylvania's Annenberg School for  
Communication. "Companies keep saying they want to engage users. That  
means opening up and not sneaking behind someone's back to draw up  
pictures of them. We need information reciprocity."

Turow added that while he supports opt-in mandates as "the ultimate  
form of respect," the debate over opt-in versus opt-out rules won't  
matter "when people really have an opportunity to interact with their  
data."

For now, privacy activists are pinning their hopes on lawmakers. Evan  
Hendricks, editor of the Privacy Times newsletter, believes Boucher's  
bill will find bipartisan support in Congress.

"This stands a very realistic chance of passage," he said. "Privacy is  
the kind of issue you can't be against."

© 2009 The Associated Press