Posted August 5, 2009 9:55 pm by with 11 comments

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DCIt looks like the Internet marketing industry could be staring at an age of government regulation and oversight that could change online advertising in major ways. While this kind of news should come as no surprise based on the new age of government intervention in business it is still enough to make even the most seasoned online marketer take notice.

The New York Times tells of how things could look very different for the online advertisers in the future

The new head of the Bureau of Consumer Protection at the Federal Trade Commission, David C. Vladeck, says it is time for that to change. In an interview, Mr. Vladeck outlined plans that could upset the online advertising ecosystem. Privacy policies have become useless, the commission’s standards for the cases it reviews are too narrow, and some online tracking is “Orwellian,” Mr. Vladeck said.

Privacy is a serious matter for sure and it should be. Vladeck appears to be on a fast track, however, to creating sweeping change if he gets his wish.

In June, the commission settled a case with Sears that was a warning shot to companies that thought their privacy policies protected them. In just over six weeks on the job, he has asked Congress for a bigger budget and for a streamlined way to create regulations. And he said he would hire technologists to help analyze online marketers’ tracking.

“These are pretty aggressive moves for an agency of a new administration,” said Charles Kennedy, who handles privacy cases at Morrison & Foerster.

Experts are calling for caution as sweeping change could upset the Internet economy. Considering the fact that the Internet is one of the few industries that is performing well in the current economy would it be prudent to just come in after 8 years of a pro-business stance and pull the rug out from under the business? Vladeck has already said that the industry’s attempts to police itself are not good enough and is meeting with industry execs to talk about the issue.

“The frameworks that we’ve been using historically for privacy are no longer sufficient,” Mr. Vladeck said.

As seen in the Sears case where consumers were paid $10 to install software that then tracked them with their consent it is no longer good enough to tell people what they are signing up for and thus be protected under the law.

Sears had included information about tracking in its user license agreement, but that wasn’t good enough anymore, Mr. Vladeck said.

OK folks so it looks like the Internet marketing industry doesn’t have the support of Washington with the current state of affairs. Also, what once was may not be anymore. While it is early, it appears as if Vladeck is bent on making his mark. What is your take on this? Reason for concern or just some DC bluster? Let us hear you. This one could be real important.

  • Sorry but as a non-American I am a little confused how privacy regulations can be seen as “… the Internet marketing industry doesn’t have the support of Washington with the current state of affairs”.

    There are currently regulations and maybe they will be beefed up…and yes that will add to overhead. It will also help increase trust for those too scared to use the internet because of the risk of their details being used/seen.

    Are you saying that the stats tracking mechanisms will disappear and we will go back to the old days?

    We all have to play the game according to the rules, and sometimes the rules change. Google and Apple change the rules all the time on the internet with little more than a whimper.

    Love to see what it really means to the internet as a whole…
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  • Allison,
    You said, “It will also help increase trust for those too scared to use the internet because of the risk of their details being used/seen.”

    I wonder in reality (closely measurable number) what is the number of people “too scared” and if the percentage impact to Internet advertising costs by increasing regulation will be worth chasing that percentage of people.

    It seems to me that the Internet was allowed into the public domain to increase communications ability between people to improve commerce exchange. Otherwise, what is it’s usefulness to society since it costs (someone’s) money to connect to it and use it?

    Also, if there is too limited of a capability to track a user’s needs and wants (even with that person’s permission) it will definitely be more difficult to find what you want quickly (who wants to spend a lot of time on a website to find what they want and then find out whether it is on sale).

    Just a couple points of view put out there, since online shopping is more secure than going to your local gas station or restaurant and using your credit card (based on the statistical evidence gathered to date.)

  • Funny


  • There are currently regulations and maybe they will be beefed up…and yes that will add to overhead. It will also help increase trust for those too scared to use the internet because of the risk of their details being used/seen.

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  • I think it is only a matter of time before the government plays a larger role in online activity. Right now it could get a little difficult with websites hosted in other countries and jurisdictions but over time I think we will see big brother hovering much closer to the internet. We are are still on the nose end of the internet industry as a whole and with any growth comes abuse. Once that abuse really starts to make more of an impact than it is now someone will need to do something about it.
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  • In the Sears example the program was up front and noted in the terms. But who reads those terms? How many of us can say we take the time to read any TOS in it’s entirety when signing up for something? Maybe there is a better way than all that legal mumbo jumbo that one can count on users not reading — sounds allot like congress and earmarks!

    Will the government be able to compensate for those that don’t make an effort to understand the technology in which they are participating? Will they be able to make people read?

    There will always be shiesters trying to take advantage of people and I’m not protecting the bad eggs who are out there with nefarious intent.

    But, while I understand the desire to protect, all too often user’s lack of knowledge and unwillingness to acquire just enough knowledge to understand how things work is what is taken advantage of — that can be remedied by educating not regulating. Combined with taking the time to “read the fine print” one can protect their privacy — without government intervention.

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  • I think it is time. With rise of false ads including the famous review websites for promoting your affiliate products and then selling that secret source as PPC teaching course by online marketers and PPC course peddlers, I have to say this, “This industry needs some shake up.”
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  • Heather

    Earlier this year, I got hold of some results from TRUSTe behavioral targeting survey. The survey results found that most consumers consider privacy important enough to take steps to protect it. Many individuals know their online behavior is being tracked,even with the assurance of anonymity and they’re uncomfortable with being targeted. Companies should increase transparency about their behavioral advertising practices. FTC should keep a sharp eye on them.