The Big Takeaway From Ad-Targeting Hearings: Legislation Is On The Way

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New legislation on behavioral-ad targeting is starting to look more and more likely for later this year — at least that was the strong suggestion during opening statements at this morning’s congressional hearings. Members of the House of Representatives’ Subcommittee on Communications, Technology, and the Internet for the most part said they were eager to enact privacy guidelines, though they said they would take care not to damage the online advertising business. The hearing, led by Rep. Rick Boucher (D-VA), is being streamed live here. More after the jump

Expect legislation this fall: Boucher echoed his fellow lawmakers’ remarks in his opening statement saying that, “The only way the internet will work is if we protect privacy.” He added that he planned to introduce legislation this fall that will change the self-policing regime currently in place. But he sought to soften the blow to online-ad execs who were waiting to testify, adding, “I am a supporter and beneficiary of targeted advertising. I like seeing ads that are relevant to me and have even bought items online as a result of these ads. I have a deep appreciation of targeted advertising as a consumer and I know that this supports the content that we all enjoy. So I have no intention of doing anything that would disrupt this essential business model. But consumers should be given clear, concise information about what sort of information a website collects about them, such as how long its stored and how it will be used. Consumers should be able to opt-in or opt-out. This arrangement should not prove to be burdensome. In fact, it’s part of the best practices many sites currently use.”

Public support: His counterpart on the committee, Rep. Joe Barton (D-Texas), also said he appreciated the relevance of targeted ads, but he was dismayed at how much information is collected about him on the web without his knowledge. Barton: “I hit the delete button every week and erase the cookies on my computer. I’m always amazed at how much information is taken from me. I think I have the right to know what information websites are gathering about me and what they’re doing with it. And poll after poll shows that the public agrees with me.”

What are we regulating?: Two other legislators on the committee tried to put the breaks on the rush to regulate. One committee member said that lawmakers need to decide which agency will regulate ad targeting, since there is overlap with the Federal Trade Commission and Federal Communications Commission. And they said Congress would need to determine who exactly will be regulated: advertisers, website producers or ISP companies.

Making their case: No major new arguments were presented by the seven “witnesses” called before the hearing today. Representatives from Google (NSDQ: GOOG), Facebook, Yahoo (NSDQ: YHOO), faced off against the leading online privacy advocate Jeff Chester, the executive director of Center for Digital Democracy, and Edward Felten, professor of Computer Science and Public Affairs at Princeton University. Companies like Yahoo and Google tried to stress that they have been adding all sorts of opt-out protections for users and that self-policing has worked. Of course, what they didn’t say was whether the threat of strict regulation is what spurred those efforts in the first place. Facebook’s rep meanwhile tried to convince members that the social net is very different by claiming its clear, open policies serve as a distinguishing feature from other sites that sell user info to third parties. The testimonies can all be accessed here, on the subcommittee’s site.

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