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Ad Groups Challenge FTC Guidelines


Mike Beirne

April 18, 2008

Advertising trade groups have responded to the Federal Trade Commission’s guidelines for online behavioral marketing with their own suggestions.

Eleven trade groups, representing marketing, advertising, retail and banking industries, submitted comments on the FTC’s bid to enact guidelines on the collection and use of personal data on the Web.

The coalition supports the FTC’s view that self-regulation would be the most effective framework to safeguard consumers when dealing with privacy and behavioral advertising. But as proponents of behavioral targeting tools have previously stated, the FTC’s draft—created last November—is too broad, the coalition maintained.

One such proponent is Alan Davidson, Google’s senior policy counsel. Davidson offered feedback to the FTC in the past, stating that the definitions for terms like “sensitive data” and “behavioral advertising” would significantly impact Google’s search and other services.

The commission also proposed setting a time limit on data that marketers retain from their behavioral targeting activity and giving consumers a way to opt out of having their online activity tracked.

“We think that [the FTC’s] proposed definition would define behavioral advertising too broadly,” said Adonis Hoffman, svp, legal counsel for the American Association of Advertising Agencies, Washington—one of the trade groups participating in the coalition. “They define it as the tracking of consumer activities online including searches, Web pages visited, content viewed in order to deliver advertising targeted to that persons interest. This definition goes way beyond the self-regulation that is appropriate for consumers in this context.”

The coalition’s response challenges the FTC principles on these key points:

-- Self-regulation shouldn’t stand in the way of benefits that online advertising offers consumers, such as free content.
-- Regulation should be limited to true behavioral advertising, meaning information collected on the Web to predict consumer preferences for receiving ads.
-- The principles shouldn’t provide choice for the collection of all information.
-- Data retention should fall within a reasonable security principle.
-- Flexible guidelines should be adopted where consumer consent is not required in all instances when changing privacy practices.
-- The existing legal and regulatory framework that applies to sensitive information restrictions should also apply to behavioral advertising.

The coalition also argued that the guidelines should apply to information collected by third parties advertising on another marketer’s Web site, but they shouldn’t apply to the owner of the site that consumers search.

In addition to the American Association of Advertising Agencies, groups participating in the coalition include the American Advertising Federation, Association of National Advertisers, Consumer Bankers Association, Direct Marketing Association, Electronic Retailing Association, Interactive Advertising Bureau, Magazine Publishers of America, National Retail Federation, Retail Industry Leaders Association and the U.S. Chamber of Commerce.


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