Washington

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

Government oversight advocate spars with online advertising proponents 12/07/2009 07:34:26 PM Eastern

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.

October