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FTC Online Privacy Report Endorses Do Not Track

The FTC issued a report today that outlines their plan to deal with privacy issues on the internet. Even though online advertisers are working on a self-policing program,it looks like the federal government is going to have their say and their say trumps anything from the private sector.

The report states that industry efforts have been “too slow, and up to now have failed to provide adequate and meaningful protection.” The FTC says that current privacy policies, which are long and full of legalize, are confusing to consumers if they can find the policy and they take the time to read it. The report wants to shift the responsibility away from the consumer and on to the advertisers. They call it “privacy by design,” suggesting that companies build “privacy protections into their everyday business practices.”

The biggest issue in the report is the idea of forcing a “Do Not Track” setting that would leave it up to the consumer to decide how much data they give away on a case by case bases. They recommend a cookie-like setting on each person’s browser that denotes whether they are okay with tracking and targeted ads or not.

The FTC does understand that there are occasions where consent isn’t necessary. Says the report:

“It is reasonable for companies to engage in certain practices – namely, product and service fulfillment, internal operations such as improving services offered, fraud prevention, legal compliance, and first-party marketing. By clarifying those practices for which consumer consent is unnecessary, companies will be able to streamline their communications with consumers, reducing the burden and confusion on consumers and businesses alike.”

The FTC takes privacy issues seriously and FTC Chairman Jon Leibowitz made it clear that they “will take action against companies that cross the line with consumer data and violate consumers’ privacy – especially when children and teens are involved.”

The main buzz word here is “transparency.” The FTC wants to make sure that consumers understand their right to privacy and that they’re given simple instructions for how to exercise those rights.  Sounds reasonable, but will it be enough to derail the practice of targeted ads or is it unlikely that many consumers will take advantage of the Do Not Track option out of pure indifference?

Public comments on the report will be accepted until January 31, 2011. To file a public comment electronically, you may click here and follow the instructions.