FTC Sticks With Online Advertising Self-regulation

Government is resisting calls from some sectors to increase regulation in the online advertising industry.  The US Federal Trade Commission is urging the advertising industry to more meaningful and rigorous self-regulation even as it expanded the guidelines for online marketers engaged in behavioral advertising, according to a report by Grant Gross of IDG News.  FTC Commissioner Jon Leibowitz wrote in a statement that this is the last clear chance for advertisers to show that self-regulation with their advertising video can effectively protect consumers’ privacy online lest government be forced to intervene with a more regulatory approach.

The FTC released its revised behavioral marketing principles recently and critics are not satisfied with the stance the government agency has taken saying it does not do enough to protect consumer privacy. “Unknown to most members of the public, a vast commercial surveillance system is at the core of most search engines, online video channels, video games, mobile services and social networks,” said privacy advocate Jeffrey Chester, executive director of the Center for Digital Democracy.

The FTC report makes some changes to four privacy principles first laid out in 2007: transparency and consumer control; reasonable security and limited data retention; consumer consent for major changes to existing privacy policies; and affirmative consumer consent for using sensitive data for behavioral advertising video.

The FTC also clarified its stance on retroactive changes to privacy policies saying a company must keep any promises it makes with respect to how it will handle and protect consumer data.  Companies, therefore must, before using previously collected data in a manner materially different from promises the company made when it collected the data, obtain the express affirmative consent from affected consumers.

Four online marketing and advertising groups have already said they are committed to working together to develop a set of privacy principles for online advertising.  The American Association of Advertising Agencies, the Association of National Advertisers, the Direct Marketing Association and the Interactive Advertising Bureau have created a task force to support the FTC’s goal of a self-regulatory program, according to Gross’s report.

Despite its critics, many people want to see self-regulation work. Time will tell whether advertising videos alone will effectively balance companies’ marketing and data collection practices with consumers’ privacy interests.

You can also read in my blog Limit Experimentation and Focus on Proven ROI.


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