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Members of Congress Question Whether FTC is Attempting a DNT End-Around

Written on
Sep 26, 2012 
Author
Mike Daly  |

The specter of new federal “Do Not Track” (DNT) legislation and its potential ramifications loom ominously over the digital ad industry. But while Congress is not expected to vote on DNT legislation until at least next year, the Federal Trade Commission (FTC) apparently has already begun to take matters into its own hands.

Last Friday, nine members of Congress sent a letter to FTC Chairman Jon Leibowitz. The letter addresses the impact DNT would have on third-party ad networks, online publishers as well as the broader economy. The members of Congress also ask the FTC Chairman to respond to seven pointed questions about his and the agency’s involvement with the World Wide Web Consortium (W3C) and the DNT issue.

More specifically, the letter addresses:

  • the impact that the European academic organization, W3C, is having on U.S. based policy;
  • antitrust issues, which favor larger first party data players and threaten the existence of third-party players and myriad publishers;
  • the potential impact on US employment, and;
  • why DNT will hinder a “Free Internet.”

What follows is the letter in its entirety. Thanks to 33Across for supplying us with a copy.

* * * * * * * *

The Honorable Jon Leibowitz

Federal Trade Commission

600 Pennsylvania Avenue N.W.

Washington, D.C. 20580

 

Dear Chairman Leibowitz:

We write to express serious concern over participation by you and your agency in multiple meetings, some held overseas, with members of the World Wide Web Consortium (W3C), and to request information pursuant to our oversight and budgetary authority. Specifically, we are alarmed that the Federal Trade Commission (FTC) is driving the development of policies and technical Do Not Track (DNT) standards to restrict online advertising without any formal legal process or Congressional authorization, but rather through informal agency threats.

We are also concerned the FTC and W3C have failed to study how certain implementations of DNT could affect third-party advertising networks, the publishers who depend on advertising revenue, and ultimately, the consumers who today enjoy a vibrant and creative ecosystem of online applications, services, and content. The third-party advertisers and publishers most likely to be affected by the implementation of DNT are not adequately represented in the W3C’s Tracking Protection Working Group (TPWG). Furthermore, the companies and activists that dominate the TPWG have limited practical experience with the complex trade-offs inherent in restricting the flow of data at the heart of the Internet’s success. For example, one recent study estimates that a European-style “opt-in” framework could wipe out $33 billion in revenues for American web-based businesses over the next five years. While we applaud the good intentions of those aiming to empower consumers, it appears some companies are using this extra-legal policymaking process to gain a competitive advantage in the marketplace. American businesses are already under enormous reputational pressure to continue evolving existing self-regulatory codes. While we applaud self-regulatory efforts already underway to help meet consumers’ evolving privacy expectations, we should also be careful not to invite one-size-fits-all, stealth regulations on our dynamic tech industry.

When companies deceive consumers or engage in practices that truly harm consumers, we urge your agency to use its existing authority to build a common law of privacy by legal means. Where the United States’ current layered approach to privacy fails, Congress will take appropriate steps. But neither foreign entities nor unelected bureaucracies nor any single company should control America’s business needs or re-shape the Internet to serve their own agendas. Accordingly, we request your prompt written response to the following questions:

  1. By what authority did Congress empower the FTC to participate in, or encourage Internet policy development through, international organizations such as W3C?
  2. Please provide itemized details relating to any federal funds spent by the FTC on W3C activities, including all meetings of FTC staff with anyone connected with W3C.
  3. Have you or any other Commissioner or FTC employee met with browser companies or publishers about DNT or the W3C outside of the W3C meetings? If so, please describe these meetings in detail, including dates of each meeting and the parties present.
  4. What studies have the FTC completed on how a DNT by default setting could affect the online ecosystem, Internet users, and U.S. employment?
  5. Did you consider antitrust issues before becoming involved in the W3C? How would you respond to concerns about the exercise of market power in this process?
  6. On August 2,2012, the U.S. House of Representatives unanimously approved H.Con.Res.127 which supports Internet freedom domestically and internationally by making clear that it is the “unequivocal policy of the United States to promote a global Internet free from government control.” Is it consistent with the intent of Congress for the FTC to encourage an international organization to create policy that could have adverse impacts on consumers and the economy?
  7. Are your actions consistent with policies set by the Administration; specifically with the Office of Science and Technology Policy, the National Telecommunications and Information Administration, and the National Institute of Standards and Technology?

Thank you for your attention to this important matter.

Sincerely,

Rep. Tom Graves

Rep. Mick Mulvaney

Rep. Reid Ribble

Rep. Marsha Blackburn

Rep. Tim Walberg

Rep. Tim Huelskamp

Rep. Jeff Duncan

Rep. Dennis Ross

Rep. Dan Burton





Mike Daly is an award-winning writer and editor with 30 years of experience in publishing. He began his career in 1983 at The News of Paterson, N.J., a long-since defunct daily paper, where at age 22 he was promoted to the position of Editorial Page Editor. Since then he has served in managerial capacities with several news organizations, including Arts Weekly Inc. and North Jersey Media Group in New Jersey and Examiner Media in New York. His work has been honored on numerous occasions by the New Jersey Press Association and the Society for Professional Journalists.

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