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FTC gives behavioral ad punters one last chance

Voluntary self-regulation's final shot

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'First party' behavioral ads need not apply

The FTC decided that their voluntary guidelines don't apply to "first party" behavioral advertising - ads using data collected by and at a single website. It claims this kind of data collection is less likely to lead to consumer harm and therefore the four principles need not cover that practice.

The Commission's principles also can be brushed off by "contextual advertising" - ads based on a user's current visit to a single webpage or a single search query that doesn't involve retention of data beyond the immediate ad result.

Although the report was approved by a vote of 4-0, statements by some commissioners indicate they think more needs to be done.

"The staff report, while commendable, focuses too narrowly," said FTC commissioner Pamela Jones Harbour. "Threats to consumer privacy abound, both online and offline, and behavioral advertising represents just one aspect of a multifaceted privacy conundrum surrounding data collection and use."

Commissioner Leibowitz said the industry needs to shape up or the days of self-policing are over.

"Industry needs to do a better job of meaningful, rigorous self-regulation, or it will certainly invite legislation by Congress and a more regulatory approach by our Commission," he said. "Put simply, this could be the last clear chance to show that self-regulation can - and will - effectively protect consumers' privacy in a dynamic online marketplace."

Many privacy advocates such as the Center for Digital Democracy say the government needs to set legal guidelines for targeted advertising now.

"We don't believe that the FTC has sufficiently analyzed the current state of interactive marketing and data collection," said Jeff Chester, executive director for the Center for Digital Democracy in a statement. "Otherwise, it would have been able to articulate a better definition of behavioral targeting that would illustrate why legislative safeguards are now required. It should not have exempted 'First Party' sites from the Principles; users need to know and approve what kinds of data collection for targeting are being done at that specific online location."

Chester said the American government shouldn't let the public remain vulnerable to the data collection and "targeting lures" of online marketing, and more meaningful action is required. ®

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