Even Mark Zuckerberg, in his 60 Minutesinterview this week, admits that privacy is among an individual's most important rights. "Privacy and making sure that people have control over their information is I think one of the most fundamental things on the Internet," he said. Last week's Federal Trade Commission recommendations on Internet privacy reaffirm a controversial position I took when I issued my Top 10 Trends for Media, Agencies and Marketers last May. In Trend #1, I wrote "While data privacy concerns are being discussed at length, with the IAB, ANA and 4As taking the lead in implementing industry regulations in the hopes of avoiding government intervention, it seems inevitable that the issue will be politicized with the industry taking it on the chin. As aggressive as the industry has been, government officials are likely to become more aggressive with both Democrats and Republicans seeking the upper hand on consumer protection regulation."
Legislation is likely to extend to mobile devices and apps as well as Internet tools that track consumer Internet traffic, location and usage. Apps have the advantage of enabling consumers to opt-in to tracking each time they access it. New regulations will benefit established and trusted marketing and media brands that consumers will be more likely to empower to track their usage.
The recently implemented Forward i logo, while ambitious and well-intentioned, is a stop-gap measure intended to demonstrate to federal regulators and Congress that the industry can police itself. It appears it has not worked as intended although the industry continues to position the Forward i as its primary initiative to protect consumers. Ultimately, the solution is likely to evolve to a universal opt-out model combined with a requirement that consumers proactively override their opt-out choice on a one-by-one basis – essentially a reversal of existing self-regulation.
Most importantly, the industry cannot continue to assume that partial solutions will meet the requirements of regulators. The report states that industry efforts to address privacy through self-regulation "have been too slow, and up to now have failed to provide adequate and meaningful protection." While research consistently demonstrates that consumers (and especially young consumers) do not consider privacy a priority, once politicians recognize it as a defining opportunity where non-partisan consensus can be reached, they will push it aggressively.
The FTC report, which is titled, "Protecting Consumer Privacy in an Era of Rapid Change: A Proposed Framework for Businesses and Policymakers," is "intended to inform policymakers, including Congress, as they develop solutions, policies, and potential laws governing privacy, and guide and motivate industry as it develops more robust and effective best practices and self-regulatory guidelines." FTC Chairman Jon Leibowitz said the FTC "will take action against companies that cross the line with consumer data and violate consumers' privacy – especially when children and teens are involved." Democratic Congressman Edward Markey (D-MA) is taking the issue a step further with a proposal designed "to ensure that kids are protected." Markey says he plans "to introduce legislation next year that will include a 'Do Not Track' requirement so that kids do not have their online behavior tracked or their personal information collected or profiled."
A response to the FTC advisory has been published by Dan Jaffe, EVP Government Relations of ANA (Association of National Advertisers), at www.ana.net. The Interactive Advertising Bureau issued a report arguing that "Foremost, we believe the industry's Self-Regulatory Program for Online Behavioral Advertising will provide the enhanced notice and simple, comprehensive opt-out mechanism the FTC has called for. The industry successfully developed this program without the need for government regulation."
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