Privacy Group Coalition Urges Data Regulation

Tue, Sep 1, 2009 at 5:20 pm

    Ten consumer and privacy groups are urging Congress to
    limit the way online information can be used for advertising and

    A coalition of ten consumer and privacy groups on Tuesday urged Congress to draft new legislation
    to preserve consumer privacy online by limiting behavioral advertising
    and establishing new ground rules for information collection and use.

    The groups — Center for Digital Democracy, Consumer Federation of
    America, Consumers Union, Consumer Watchdog, Electronic Frontier
    Foundation, Privacy Lives, Privacy Rights Clearinghouse, Privacy Times,
    U.S. Public Interest Research Group, and The World Privacy Forum — have prepared a 13 page legislative primer spelling out proposed limitations to behavioral advertising.

    The recommended changes include: protection for information that isn’t
    necessarily "personally identifiable information"; a prohibition on the
    use of sensitive information related to health, finances, ethnicity,
    race, sexual orientation, personal relationships and political activity
    in behavioral tracking; a ban on behavioral data collection on
    children; a requirement that data collected for one purpose cannot be
    used for another without explicit consent; data security guarantees;
    and a consumer right to see, review, and correct stored data, among
    other suggestions.

    The coalition expects members of Congress to draft a bill this
    fall that redefines fair information practices in light of the way data
    is currently collected.

    The move comes two months after a coalition of advertising
    trade groups, perhaps sensing increased Congressional willingness to
    legislate, declared a set of seven self-regulatory principles to
    protect consumers from behavioral advertising.

    The principles call for industry educational outreach, transparent data
    collection practices and disclosures, consumer control over collected
    data, reasonable security and limited data retention, obtaining consent
    when policies change, heightened protection for data regarding
    children, health, and finances, and advertiser accountability.

    Self-regulation is generally preferred by companies to government
    regulation because compliance with industry rules is typically less
    costly and less restrictive of potential business models than compliance with government requirements.

    But John Simpson, a project director at Consumer Watchdog, on a media
    conference call about the privacy coalition proposal, said, "In almost
    any industry, self-regulation does not work. We’ve seen it in the
    capital markets and we’ve seen it online."

    Behavioral advertising has long been a topic of concern among
    legislators, though the issue has become more pressing since March when
    Google began testing what it calls "interest-based advertising."

    Behavioral advertising uses data gathered from consumers’ online
    activities, sometimes in conjunction with other data, to determine
    consumer interests and to present ads that cater to those interests.
    Such advertising tends to command a premium because ads tailored to
    viewer interests tend to perform better than ads placed with no regard
    to what consumers care about.

    has acknowledged that advertising that makes use of behavioral data
    presents a challenging policy issue. "On the one hand, well-tailored
    ads benefit consumers, advertisers, and publishers alike," said Nicole
    Wong, Google’s deputy general counsel, in a blog
    post in March. "On the other hand, the industry has long struggled with
    how to deliver relevant ads while respecting users’ privacy."

    "We welcome the dialogue and are supportive of greater
    transparency and choice for users," said Google spokesperson Christine
    Chen, noting that Google couldn’t comment on specifics until more
    details about possible legislation became clear.

    While Google may be the most high profile practitioner of
    behavioral advertising, it’s companies that have pushed the privacy
    envelope with more controversial practices, like NebuAd and Phorm, that
    concern consumer groups the most.

    A major goal of the privacy and consumer groups is to bring
    more transparency to online information collection and use, because
    much of what is done with consumer data is not disclosed.

    On the media conference call, the representatives of the
    various privacy and consumer groups stressed that this isn’t about
    killing behavioral advertising but safeguarding consumers against real
    and ongoing harms that are a consequence of the absence of privacy.

    "The basic idea behind all of these documents is we want consumers to
    be able to take advantage of all of these technologies without these
    technologies taking advantage of the consumers," said Pam Dixon,
    executive director of the World Privacy Forum. "And right now that
    balance is not there."

    "Consumer privacy can be protected while we get to enjoy the
    benefits of the digital marketplace," insisted Amina Fazlullah,
    legislative counsel of U.S. Public Interest Research Group.

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