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Expected Flood Of Opinion Ends With A Trickle: Proposed FTC Behavioral Rules Comment Period Closes

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By the time the Federal Trade Commission stopped accepting public comments on its proposed behavioral targeting rules Friday afternoon, officials had only 31 submissions displayed on its website. Hardly the deluge that was predicted, but perhaps the agency was still getting caught up. As for what was listed there, predictably, businesses asked the FTC to continue allowing the industry to self-police; just as predictably, privacy advocates sought tighter control and greater clarity on the part of sites that collect user data for ad targeting.

Protecting industry by defending consumers: Late that day, we were alerted to two separate letters submitted to the FTC from the Online Publishers Association and the Magazine Publishers of America, which offered a note of support to the former’s recommendations. Both industry organizations pleaded with federal regulators to avoid “overbroad regulation.” In its eight-page missive, the OPA urged the commission to reject calls to transform its behavioral targeting principles into de facto legal strictures. The OPA tried to couch its recommendations as a defense of consumer choice, saying strict enforcement of its draft proposal could dampen web publishers’ ability to offer a variety of features to its users. In particular, the OPA says limiting the use of cookies would only frustrate consumers who count on the web pages they visit regularly to remember their settings. Furthermore, the OPA asserts that cookies actually reduce a user’s repeated exposure to a single ad or advertiser, because sites want to show consumers a greater variety of targeted messages.

The Beacon defense: The OPA’s letter also invoked vague First Amendment concerns, saying tougher rules would constitute interference with publishers’ right to select the content that appears on their sites. Facebook’s Beacon experience was also mentioned as proof that the public itself represents a powerful enforcement body, since the social net quickly modified the way its ad program uses personal information after a storm of protest erupted last fall over that feature’s introduction. With behavioral ads under greater assault by regulators and legislators, internet companies are aligning to fight back. As we mentioned earlier, Google (NSDQ: GOOG), Yahoo (NSDQ: YHOO), AOL (NYSE: TWX), Facebook, Comcast (NSDQ: CMCSA) and others have banded together to fight a proposed bill in the New York State Legislature that would curtail their ability to gather user data.

Apart from that effort, another industry union, the Network Advertising Initiative, which is comprised of AOL Platform-A units and Tacoda, Yahoo’s BlueLithium, and Google’s DoubleClick, has published a collective answer to the FTC’s proposed regs. The group believes that a method allowing users to “opt-out” of sites’ ad targeting features goes just far enough. But privacy advocates contend that giving the users the more active choice to “opt-in” would promise advertisers more willing subjects, while protecting those who weren’t aware their information was being collected.