FTC moves ahead with 'Do-Not-Track'

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The Federal Trade Commission called for the implementation of a universal “Do-Not-Track” option that would allow consumers to opt out of all third-party online tracking and behavioral targeted advertising.

The FTC specifically suggests the “Do-Not-Track” mechanism take the form of an add-on to the browser, similar to a cookie. Consumers ultimately would be able to check a box that would transmit their preference to opt out of tracking to websites as they surf the Web. Companies would be held accountable for failing to honor the option the consumer chooses. The FTC said it hopes this will prevent consumers from the need to opt out on a “company-by-company or industry-by-industry basis.”

It would not build a “Do-Not-Track” registry on par with the Do-Not-Call registry.

The FTC issued its findings in a report December 1 that is the culmination of a year of roundtable discussions the agency hosted on the topic of online privacy. Earlier this year, FTC Chairman Jon Leibowitz said the agency was considering the “Do-Not-Track” option, but the report had not yet been finalized.

“From my perspective… A legislative solution will surely be needed if industry doesn't step up to the plate,” Leibowitz told reporters during a teleconference on the report December 1.

The FTC issued the report just a day ahead of Thursday's House subcommittee hearing that will address the possibility of “Do-Not-Track” legislation. The hearing's witnesses include representatives from the FTC and other federal agencies, as well as marketers from Symantec and Time Warner and consumer advocates.

Shortly after the FTC released its proposal, Senator John Kerry of Massachusetts issued a statement in support of the Do-Not-Track option. Sen. Kerry (D-MA) has promised to introduce his own legislation in support of consumer privacy online early next year.

The FTC chides the marketing industry throughout the report for having "fallen short" in self-regulation, a charge that the Direct Marketing Association (DMA) flatly denies.  

“We strongly disagree with them that self-regulation is not working,” said Linda Woolley, EVP of government affairs for the industry association.

In October, the DMA -- along with other media and marketing trade groups, such as the American Association of Advertising Agencies -- introduced a self-regulatory program that encouraged businesses to add an advertising opt-out icon to their websites. The Advertising Option Icon program also allows consumer to visit the website www.AboutAds.info to view and opt-out of tracking of their browsing behavior by third-party companies.

Leibowitz asserted during the call with reporters that the industry was not moving fast enough, nor was its opt-out option comprehensive enough. He also promised “more privacy cases” in the coming months as the agency enforces existing rules.

Woolley called a ‘Do Not Track' mechanism “completely premature.”

“The thing we look at is when the FTC and certain members of Congress say consumers are reluctant to use the Internet due to privacy concerns and then you look at Cyber Monday's billion-dollar transactions," she said. "The idea that [consumers] are uncomfortable is unfounded.”

The FTC report also calls for providing consumers better access to see what personal information data brokers might hold on them, greater consumer education on their options and shorter, easier-to-read online privacy disclosure policies.

The public and industry can offer comments on the proposal through January 31, 2011. The FTC will use those comments to issue another report in 2011. 

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