Online Marketers, Ad Community to Release Self-Regulatory Privacy Guidelines


A lot of behavioral data could have been collected between the start and end times of a Hill hearing Thursday on online behavioral advertising and data collection. But when it was completed more than 10 hours after it had begun, legislators had gotten an earful on privacy policies.

Among the key takeaways were that online marketers and the ad community would be releasing self-regulatory guidelines on privacy and online advertising within a matter of weeks.

A source says the goal is to get them out before House Communications Subcommittee Chairman Rick Boucher (D-Va.), who co-chaired the hearing Thursday, can mark up an online privacy bill he has said is a legislative priority.

Look for the Federal Trade Commission, rather than the FCC, to be pitched as having a role in monitoring those self-regulatory guidelines, which are being developed after the FTC said the industry needed to do more on its own or it would have to step in.

When asked who should be the lead agency in enforcing online privacy protections, the FTC was cited by virtually all of them.

Co-chairman Bobby Rush (D-Ill.), who heads the Commerce, Trade and Consumer Protection Subcommittee, apologized profusely for making the witnesses, including top execs from Google, Yahoo! and Facebook, cool their heels for most of the day, but pointed out that there had been a record 54 floor votes that had caused the delay (the hearing began at 10 a.m. and finished at 8:20 p.m., including an almost eight-hour recess).

But legislators stuck around, too, and asked a number of probing questions.

Helping frame the concerns of consumers over protecting personal information was Jeff Chester of the Center for Digital Democracy.

While much of the discussion was on Internet pixel level of sticky cookies, IP addresses, and meaningful definitions of opt-in and opt-out, Chester talked of the big picture, which he painted as a world where every move is being watched--what Web surfers read, what they buy, how much they are willing to spend, how much they make, what race they are--and traced minute by second, tracked invisibly and with no accountability, then sold in a mili-second in online ad auctions.

He called it a digital data collection arms race that need government regulations to keep it in check.

He laid some of the economic bust of the mortgage industry at the feet of online marketers pitching people mortgages they could not afford.

He also invoked a Madison Avenue Big Brother making "claims and assumptions" about people and targeting them with powerful and immersive multimedia services that are not understandable or controllable by consumers.

He argued that government would need to step in to help them get that control. Chester said his call for privacy rules and consumer protection was not about undermining the role of online advertising, or about the practices of any one company.

With that he had a lot of kindred spirits among the witnesses and legislators.

Everyone was in general agreement that online advertising was not the issue, but how viewers online data was being used and re-used to target advertising to them, and what the government should or shouldn't do about it.

Nicole Wong, Google deputy general counsel, called online advertising critically important to the economy and diversity of speech. But she also said that if there is going to be legislation, her company supports a comprehensive approach and one that applies uniformly. She said that would be a baseline standard that applies across industries.

Charles Curran, of the Network Advertising Initiative, a coalition of online marketers pushed for self-regulation, saying new guidelines would be ready soon dealing with the transparency and consumer choice that most witnesses agreed were key to any online advertising policies.

But he warned that any legislative approach that mandated to a strict opt-in regime could pose a "profound risk" to ad supported services, could impair the consumer surfing experience, which could in turn "uproot" the revenue model.

Chester countered that self-regulation has failed to this point, and that in any case, it would only be as good as the legislation that stood behind it.

Boucher suggested such self-regulations could be made part of his eventual bill.