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Online Tracking: FTC Chair Leibowitz Needs to Lead by Example

Written on
Oct 12, 2011 
Author
Russell Glass  |

ADOTAS – Yesterday at an event sponsored by a large group of privacy watchdogs (the ACLU, Center for Digital Democracy, Consumer Action, Consumer Federation of America, Consumers Union, Consumer Watchdog, Electronic Privacy Information Center, Privacy Rights Clearinghouse, US PIRG and World Privacy Forum to be exact) called “Yes, They Really Know It’s You: The Digital Collection of Personal Information from Citizens,” Federal Trade Commission Chairman Jon Lebowitz gave a keynote in which he said:

“One day you might print out a CDC fact sheet on alcoholism to help your son with a project for health class. Click. Or you order a box of your mother’s favorite candy to take her when you go visit. Click. Or you buy the book ‘The Winner’s Guide to Casino Gambling’ as a raffle prize for your church’s Las Vegas night. Click.”

He went on to say: “You know you are a dutiful parent, but a potential employer could see a boozy job applicant. You know you are a thoughtful daughter, but a health insurer could see a destined diabetic. You know you are a generous member of the community, but a loan officer could see a risky gambler.”

In his summary of the potential risks of the Internet, he eloquently describes the fears of a few and attempts to stoke the fears of the masses.

He was generally very fair in his assessment of the current situation and his praise for the online advertising industry’s self-regulatory efforts. However, examples like this do more damage than good, and he has to be careful about stoking a fire with examples that not only put the cart before the horse, but have the horse riding in the completely wrong direction.

Note for a second that his examples involve the healthcare industry, the finance industry or potential employers. Each of these industries and constituents have rules and regulations which prevent this very activity that Lebowitz is trying to prevent – discriminating against consumers unfairly. In addition, the FTC has rules in place and there are clear practices that are allowed and disallowed.

If the dawn of the Internet age requires additional protections, we should put those in place. However, by creating blanket rules against tracking, we run the risk of riding in the wrong direction and invoking the law unintended consequences while harming consumers way more than protecting them.

To illustrate, let’s use a few different examples similar to the ones given by Lebowitz:

One day you go to the WebMD website to search for facts on salmonella. Click. Hundreds of others in your town also do the same thing and the CDC (which in partnership with WebMD is watching this clickstream data) anonymously starts to get a sense that there’s an outbreak. They react and save dozens of lives because of how fast they received the information that something was going on – well before anybody even started to register at local doctors and hospital groups with symptoms.

This is a very real example of the powerful use of data in a way that can be helpful to humanity and save lives. If the government prevented this kind of tracking, we would lose the ability to help large groups of people.

Another example:

One day you are surfing the web and you log into Macy’s, your favorite retailer website. Click. They have a dress you love but it’s way too expensive so you leave the site. Later that week, Macy’s puts the dress on sale and anonymously shows you a display ad that tells you the dress is 50% off. Click.

Again, a real example of how consumers are able to significantly benefit from online tracking. If that person hadn’t gone to the site and clicked on that dress, she may have never known that the dress went on sale, and would have missed out on a huge opportunity.

So it becomes clear that the answer isn’t preventing tracking – that is putting the cart before the horse and could lead to significantly more harm than good. The answer is preventing the misuse of the data to harm, and the FTC can and should continue to build whatever constructs are necessary to prevent misuse, fraud or unfair business practices. That would be getting on the horse and riding in the right direction.





Russell Glass is the CEO of Bizo, a targeted B2B advertising network. Glass is a serial technology entrepreneur, having founded or held senior positions at four venture-backed technology companies. Most recently Glass led the marketing and product management teams at ZoomInfo, a business information search engine.

Reader Comments.

Nice response Russell. I would just add that most of these examples are already covered by existing laws as they constitute “adverse actions” to consumers. Not to mention industry self regulation does, or will soon, explicitly prohibit the use of marketing data for such purposes.

Posted by Mike Zaneis | 1:24 pm on October 12, 2011.

Excellent points Russ. No one wins when we make important policy decisions based on stoking unreasonable fears.

Posted by Tim Avila | 6:29 pm on October 12, 2011.

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