Leibowitz: FTC Not Interested in Regulating Behavioral Ads If Industry Can Do Job

FTC chairman says ads are good for consumer so long as choice and control are maintained

By John Eggerton -- Broadcasting & Cable, 5/12/2010 7:22:10 PM

FTC Chairman Jon Leibowitz told cable operators in Los Angeles Wednesday (May 12) that the commission is not interested in regulating behavioral advertising so long as the industry is making "progress" toward self-regulation.

"So long as self-regulation is making forward progress, the FTC is not interested in regulating in this area," he said at a keynote speech at a plenary session on advertising at the Cable Show. He also said the commission has "great hopes" for proposed self-regulatory guidelines proposed by direct and online marketers in conjunction with the Better Business Bureau.

According to prepared text of the speech, Leibowitz even gave a shout-out to behavioral adds, suggesting that so long as consumer choice and control were preserved, such ads were "usually good for consumers, who don’t have to waste their time slogging through pitches for products they would never buy; good for advertisers, who efficiently reach their customers; and good for the Internet, where online advertising helps support the free content everyone enjoys and expects."

But preserving consumer choice is increasingly tough in cyberspace, he said, where "we scatter crumbs of personal information wherever we go."

Leibowitz highlighted one of the online marketing industry's self-regulatory proposals, which is to explain information-collection practices using common language, and preferably plain language, Leibowitz suggested. "Today, few of us can comprehend the amount of personal data we’ve left open for capture on the Internet, and disclosure forms are most often written by lawyers, paid, it seems, by the syllable. The consent half of 'notice and consent' rarely reflects a consumer’s conscious informed choice."

Leibowitz said that he did not want to shut down responsible businesses, including online marketers and behavioral advertising.

Rep. Rick Boucher (D-Va.) last week released a discussion draft of an online privacy bill that combines an opt-in/opt-out regime for the collection of personal data for targeted marketing and advertising.

Leibowitz said he had warned that Congress would step in if the industry did not adequately protect consumer information. "This is exactly what seems to be happening," he said.

Leibowtiz reiterated the FTC's own suggestions for self-regulatory principles, which are 1) inform consumers in plain English and large type what information is being collected and let them choose whether they want that data collected; 2) store that data securely; 3) explain any policy changes clearly; and 4) sensitive data collection must be an opt-in regime, meaning companies have to get affirmative consent.

But he said for any more guidance, cable operators would have to "stay tuned."