Jennifer LeClaire, newsfactor
The Federal Trade Commission is getting an earful about Internet privacy. The opinions on the FTC's proposed self-regulatory principles to govern online advertising vary widely, with Microsoft taking bold steps to suggest an approach it deems "comprehensive."
On Friday, Microsoft proposed a five-tiered system to protect consumers' privacy. Its recommendations call for standards in five key circumstances: when site visitors' data is collected for online advertising, when ads are delivered on unrelated sites, when sites engage in behavioral advertising, when personally identifiable information is used, and when sensitive personal data is used.
"We welcome the opportunity to work with the FTC to ensure that online consumers benefit from meaningful privacy protections," said Brad Smith, senior vice president and general counsel for Microsoft. "Online advertising should put consumers in the driver's seat, not only with the information they want to see, but also with the tools to protect their privacy."
Greater Risk, Greater Protection
The recommendations reflect Microsoft's Privacy Principles for Live Search and Online Ad Targeting, standards the company adopted in 2007 to promote greater transparency and give consumers increased control over privacy.
"Even as consumers value the benefits of online advertising, they may not fully appreciate the role data collection plays in the delivery of online advertising," Smith said. "Microsoft's proposed guidelines will help consumers receive relevant and helpful information while helping ensure their privacy is respected."
Bucking the System
While Microsoft is busy pushing its standards, others are speaking out against the FTC's recommendations. Specifically, the Newspaper Association of America (NAA) filed comments with the FTC on Friday that argued the proposed privacy standards could infringe on First Amendment rights. Ads are a form of speech, the NAA said, and newspapers have a right to serve them.
"The agency has ignored significant constitutional issues raised by the proposed behavioral-targeting principles," the NAA said. Ads displayed to readers based on their online searches are "not only truthful advertising speech, but advertising speech that meets their interest," the group's filing says.
Meanwhile, the Center for Democracy and Technology (CDT) expressed concerns about the status quo. Two key areas are the use of Flash to reset cookies, effectively eliminating consumer choice for privacy, and the risk of health searches being used inappropriately to serve up ads to consumers. Overall, though, Ari Schwartz, CDT deputy director, is pleased that the discussion is moving forward.
"Two or three years ago some of these same issues existed and the viewpoint was the industry wasn't healthy enough to have the discussion and the FTC wasn't educated enough to move forward. Now we are past that point," Schwartz said. "The downside is consumers are being tracked in ways that defy their expectations, in our viewpoint, and as the industry grows, that's going to have to change."
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