Google, Yahoo and Other Companies to Be Targeted in Complaint to FTC
[Source: MercuryNews.com, by Mike Swift; April 8, 2010]
Privacy advocates plan to file a complaint with federal regulators today against tracking and profiling practices used by Google, Yahoo, Microsoft and other Internet companies to auction off ads targeted at individual consumers in the fractions of a second before a Web page loads.
The complaint being filed with the Federal Trade Commission by the Center for Digital Democracy and two other public interest groups charges that a "massive and stealth data collection apparatus threatens user privacy," and asks regulators to compel companies to obtain express consent from consumers before serving up "behavioral" ads based on their online history.
The complaint, being joined by U.S. PIRG — the national federation of state Public Interest Research Groups — and the World Privacy Forum, asks Internet companies to acknowledge that the data they collect about a person's online movements through software "cookies" embedded in a Web browser allows advertisers to know details about them, even if those cookies don't have a person's name attached.
"This idea that a cookie is nonpersonal information no longer really applies in this digital age. You don't need to know a person's name to know a person — to understand their likes and their dislikes, the contents of what they read, what they put in their shopping cart. It's really personal now," Jeff Chester, executive director of the digital center, said in an interview.
"There's a balance that needs to be set here," he added of the groups' complaint against so-called "real-time" and "behavioral" advertising. "We want online advertising to flourish, but there has to be some rules."
Behavioral advertising refers to the practice of tracking an individual's online movements and using the portrait that emerges to target advertising.
Google launched what it dubbed "interest-based advertising" about a year ago, saying it would make advertising more relevant and interesting by tracking users and categorizing their interests in topics such as sports, gardening, cars and pets. More recently, Google, Yahoo and other advertisers have built their capacity to provide "real-time" ads — adding the element of immediacy by targeting ads that take into account a person's up-to-the-minute behavior. Such real-time ads can be targeted in the 50 milliseconds or less between the time a person clicks on a website and the time the page appears.
Advertisers argue that they do value user privacy. A Google spokesman said the company never sells or shares data it collects about its users with any other company. Google offers a Web page — www.google.com/ads/preferences — where a user can disable tracking cookies used for the company's "interest-based" ads, and says it "has already implemented industry-leading privacy controls."
Yahoo is working with other companies to create an icon delivered with an ad that users could click to learn more about how their Web history was being categorized for advertising purposes and how to opt out of such tracking. Yahoo also favors development of a single industry website where users could go to opt out of tracking for ad targeting.
"We understand that this technology can be complicated and confusing for consumers, but we want to make it easier and to demystify this for consumers so they can engage in some control," said Anne Toth, vice president of global policy and head of privacy for Yahoo.
The gist of the disagreement is that privacy advocates say Internet companies should obtain prior consent from users for behavioral advertising, while Yahoo, Google and other companies say the right policy is to allow consumers to opt out if they don't want to be tracked online.
Besides Google and Yahoo, the FTC complaint also names smaller online advertisers such as AppNexus, MediaMath, Rubicon Project and Rocket Fuel. Chester said he and other privacy advocates are particularly concerned that some online marketers are developing the ability to combine a person's Internet history with personal data from their offline life — such as the consumer's race, gender, profession and income — to fine-tune online ad targeting.
The FTC is already studying the issue, and proposed legislation that may require many companies to stop using behavioral advertising unless consumers first give their consent is likely to be introduced in Congress this spring. But Chester says the current system is out of control, in part because the vast majority of consumers have little idea of the extent of tracking and profiling being done.
"We have to make this system transparent and accountable," Chester said.
