FTC Commish Declares Comity with Marketers

Oh, the teetering scales of justice. FTC Commissioner Julie Brill opened her keynote address at the DMA in DC conference on March 12—her birthday—by declaring that her agency’s privacy efforts were as pro-business as they were pro-consumer, focused on, as she put it, “keeping markets vibrant and competitive.” But Brill concluded with a shot to the collective gut of the direct marketers in attendance, pledging to pursue possible oversight of “discriminatory marketing offers.”

“The gift I would like from all of you tonight is to accept that we share a common goal—a vibrant and innovative online and mobile marketplace fueled by the responsible use of consumer data,” Brill said.

But the privacy-focused FTC commissioner was not in a giving mode herself when it came to behavioral targeting by marketers.  “There are data brokers that provide data for marketing to consumers, and there are those that provide information for non-marketing purposes that fall outside the FCRA [Fair Credit Reporting Act],” she said. “One area of growing concern is discriminatory marketing offers—qualifying some consumers to be eligible for discounts or other benefits, based on behavioral data, and disqualifying others, all without giving consumers the opportunity to ensure that the information on which these decisions are based is accurate.”

The rapid advance of mobile device technology—and its catalyzing effect on the volume of data collected—formed the central theme of Brill’s presentation. While she voiced confidence that the majority of marketers use data responsibly, she insisted that the digital free-for-all accelerated by mobile technology produced enough bad buys to require a “cop on the beat.”

“We are going after the players that treat sensitive data sloppily; that collect information from children without their parent’s consent; or that engage in deceptive or unfair practices regarding the extent to which they are tracking consumers,” Brill said.  The FTC has already brought mobile privacy actions against three companies in 2013: mobile device maker HTC America, background reporting company Filiquarian, and Path, a mobile social networking app. Path fell afoul of both the FTC Act and COPPA for raiding users’ address books and faces $800,000 in penalties.

Brill did have one “gift” for marketers—an update of its “Dot Com Disclosures” guidelines, amended to account for special circumstances posed by mobile devices. The revision of the guidelines originally issued in 2000 came after two years of workshops and public comment periods.  New mobile rules  include:

  • When information is needed to prevent a claim from being deceptive or unfair, the advertiser should incorporate the info rather than have a separate disclosure.
  • If a separate disclosure is necessary, it must be clear and conspicuous.  If the mobile platform does not allow for such clarity, don’t use that platform.
  • Placement of disclosures should be as close to the triggering claims as possible.
  • Certain important disclosures should be “unavoidable” by mobile users, with ads designed in such a way as to give consumers no choice but to see them.

Brill made clear that the FTC expects marketers to be self-policing in determining which ad solutions may not be cutting the mustard. ”If an advertiser knows that a significant proportion of consumers are not noticing or understanding a disclosure that is necessary to prevent an ad from being deceptive, the advertiser should remedy that,” she said.

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