Industry must let consumers opt-out of tracking, secondary use of data: FTC director

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An industry-developed universal Do Not Track mechanism must allow consumers to opt-out from targeted ads and data collection, as well as enforce their preferences, said David Vladeck, director of the Federal Trade Commission's Bureau of Consumer Protection.

However, the FTC does not believe legislation is a necessity if the online ad industry implements a viable self-regulatory mechanism, he said at the Interactive Advertising Bureau's Networks & Exchanges Marketplace in New York on May 16.

“Consumer privacy is now a front-burner issue in Washington, not just with the FTC but also for Congress,” said Vladeck.

US Sen. Jay Rockefeller (D-W.Va.) introduced an online privacy bill May 9 that would task the FTC with establishing guidelines for the creation of a universal Do Not Track mechanism. Rockefeller's bill echoes the Do Not Track Me Online Act of 2011, introduced by US Rep. Jackie Speier (D-Calif.) in February, which also calls for a universal Do Not Track platform.

“A successful Do Not Track mechanism could be developed by the industry without legislation, so long as it [adheres to] five essential components,” said Vladeck. He added that the FTC has disapproved of “the progress of self-regulation,” but that it is “our hope that the industry will implement a simple, effective and enforceable Do Not Track mechanism.”

Vladeck added that the mechanism must allow consumers to block the collection and use of behavioral tracking data. Because “we do not have a clear understanding of what behavioral data is used for apart from advertising,” he said the requirement is necessary to prevent the “secondary use” of personal data by entities such as health insurance companies or future employers.

Vladeck added that the online ad industry, networks and advertisers have been unclear about the secondary uses of consumer data.

“We ask these questions repeatedly; we haven't yet gotten a clear answer,” he said. “Until we get answers to our questions about secondary uses, we cannot support a Do Not Track mechanism that opts consumers out of targeted ads but allows data to be collected for undisclosed secondary purposes.”

Any acceptable self-regulatory mechanism must also be universal, Vladeck added, to simplify the opt-out process and avoid forcing consumers to change opt-out preferences “every time they clear their cookies or close their browser.”

However, any self-regulatory initiative “should not undermine the considerable benefits that online behavioral tracking had offered consumers,” he said. When provided an “informed choice” between targeted ads and non-targeted ads, he said consumers would “likely” choose targeted ads because of their increased relevance.

Vladeck said later this year the FTC will issue a final version of the policy framework it released last December that called for a universal Do Not Track mechanism.

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