Chester Pushes For Under-the-Hood Privacy Check-Up

Government oversight advocate spars with online advertising proponents

By John Eggerton -- Broadcasting & Cable, 12/7/2009 7:34:26 PM

Online surfers may not always know who is delivering those targeted ads, but there was no such confusion about where behavioral advertising critic Jeff Chester was coming from. The passionate advocate for government oversight of online marketing spoke out at an FTC workshop on consumer privacy Monday, importuning the commission to look holistically and seriously at an expansive data collection system.

Chester took issue with fellow panelist Berin Szoka, of the Progress & Freedom Foundation, who talked about the importance of online advertising to the health of journalism and said that rather than a privacy crisis, there was a crisis about how to fund the media.  He said that meant supporting content with online advertising that could be adversely affected by regulations.

Chester conceded that funding journalism was an important conversation, just not the operative one in a discussion of behavioral advertising. He called a false dichotomy the suggestion that there had to be a tradeoff of privacy protection for saving journalism. There is no reason why there can't be a "citizen-friendly" system.

Szoka asserted that pay models for online content--subscriptions, micropayments--have failed, but Chester said the model was going to be a combination of pay and ad-supported, again suggesting it was not a case of either/or.

Szoka countered that the real world is full of tradeoffs and that in a digital economy where people are not willing to pay for bits, that tradeoff is vital.

Chester is no fan of current online self-regulations, and had company in panelist Amina Fazlullah of U.S. PIRG.

She said that while the industry has announced self-regulatory principles on behavioral advertising, there is no real enforcement provision beyond self-reporting. She said unless there is strong privacy legislation there is little accountability.

Linda Woolley from the Direct Marketing Association, suggested self-regulation on all fronts was working. She said the DMA has had a self-regulatory program covering all channels of communications for the past 30 years, that there were over 3,000 inquiries over the past year and that clear violations of the law were routinely referred to the FTC.

She also said that consumers did know what was going on online. She said you can't just assume that if consumers knew X they wouldn't be doing Y.  Consumers have been online to the tune of 100 million people who made online purchases on Cyber Monday (the Monday following Black Friday), she added.

She cited efforts by Google and Yahoo! to give surfers more control of their data, including getting rid of unwanted cookies. She said that DMA, which has a site, DMAchioce.org to help control the number of advertising e-mails consumers get, was considering building out the site to include online preferences as well. FTC staffer and panel co-moderator Peter McGee suggested that might be putting too much responsibility on the consumer.

Chester's online preference was that the FTC look "under the hood" at a laundry list of issues, including redlining and online discrimination and targeting, particularly what he said was the financial services industry's targeting of loans.

Chester said behavioral advertising was just a small part of an overall tracking and targeting system. He agreed with FTC Chairman Jon Leibowitz, who said that the FTC was at a critical moment in the history of privacy protection.

He said that if those 100 million Cyber Monday shoppers knew how their information was being used to profile them, they would begin to object strongly.