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FTC Rep Illuminates Agency’s Online Privacy Concerns

Written on
Jan 14, 2010 
Author
Gavin Dunaway  |

ftc_smallADOTAS – If someone tailed your trip to a shopping mall and noted every store you went into, everything you looked at and everything you purchased, wouldn’t that be — to use the technical term, said Leonard Gordon, the Federal Trade Commission’s Northeast regional director — “icky”?

Well, to some extent that’s what companies are doing with online behavioral targeting. Heads nodded, shoulders shrugged and grimaces of reluctant agreement appeared around the long table.

The media coverage of the relationship between the interactive ad industry and the FTC comes across as very adversarial — especially since the appointment of FTC Chairman Jon Leibowitz, who many see as firmly in the consumer’s corner — but the packed conference room at the offices of advertising and marketing law firm Venable LLP had a very congenial air. Serving as a moderator of sorts was Thomas Cohn, now counsel with Venable but previously the guy in Gordon’s shoes as Northeast regional director.

The quick-witted Gordon — who noted that his commentary was his opinion and not the official FTC stance — said the commission isn’t blind to the fact that ads pay for the Internet.

“We don’t want to thwart the online advertising industry,” he said. “We don’t want to kill the golden goose.” But the problem remains that consumers don’t understand what is being done with their information collected online.

Industry self-regulation is a positive development, but it is still not at the level the FTC wants it to be. He admitted, however, the FTC isn’t quite sure where the level of regulation — self or federal — should be, part of the reason there are two more privacy roundtables coming this year, the next one in Berkeley, Calif., on Jan. 28. However, Liebowitz noted in a meeting with New York Times staff that the FTC would take a more active role in ensuring consumer safety.

When someone noted that consumers tend to choose the default when it came to such things as online privacy settings, Gordon argued that companies must be more transparent and “benign” in explaining and determining the defaults.The current recession is proof enough that consumers don’t always act in their best interests, he noted.

The FTC is highly aware that regulating this area is not an easy task, especially considering that there is a large generational gap on the notion of a reasonable expectation of privacy. In addition, Gordon sees regulating the collection of mobile data as a future trouble point as it’s next to impossible for a consumer to understand a privacy agreement

The FTC under the Obama administration certainly has sold itself as the defender of the proletariat, protecting the consumer from big bad advertisers who would mislead them and violate their privacy. But Gordon’s talk at the Venable offices showed that the commission is seeking middle ground on online privacy issues, as well as online affiliate marketing and blogger disclosure guidelines.





Gavin Dunaway is Editor, U.S. at AdMonsters, a leading trade publication, event producer and service provider for the online advertising industry. Previously, he had been Senior Editor of Adotas, where he arrived after years of ping-ponging around various industry publications. This Washington, D.C. native and George Mason University graduate also enjoys playing electric guitar so loud that the walls shake.

Reader Comments.

The problem is that we neither trust the companies with that data, nor the government. A consumer can use the market to discredit a company, and cause it harm. But the government can abuse that information, abuse consumers, and then justify abuse of that private information in the context of whatever ‘crime’ it chooses to.

Posted by Curt Doolittle | 7:30 pm on January 14, 2010.

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