FTC: Advertisers Can’t Self-Regulate, Consumers Need ‘Do Not Track’ Option

Jon Leibowitz, Chairman, FTC

The FTC released extensive privacy guidelines today [PDF], urging Congress to create a “Do Not Track” option for internet users, saying that self-regulation of online advertisers and marketers just isn’t cutting it. Do Not Track wouldn’t be like the “Do Not Call” list that prevents telemarketing calls. It isn’t a registry that consumers sign up for. Instead, it would be an option implemented right into users’ browsers. If Do Not Track is selected, the browser would send out a signal to each web site being accessed saying that the browser shouldn’t be watched with tracking mechanisms such as persistent cookies. While a majority of the FTC is behind the idea, getting a Do Not Track bill through Congress is likely to be tricky.

Many major publishers and advertisers are strongly opposed to restrictions on ad targeting. They argue that if large numbers of people can remain anonymous from the various tools that track where they go on the web and what they buy, that that would significantly reduce advertising revenues.

Implementing a Do-Not-Track option would require buy-in from both browser companies and third-party trackers, mainly advertisers, who would need to respond to the signal being sent out. FTC Chairman Jon Liebowitz said that all four major browser companies-Microsoft (NSDQ: MSFT), Mozilla, Google (NSDQ: GOOG), and Apple-are experimenting with Do-Not-Track options already, but he wants them to move faster.

Leibowitz acknowledged that Implementing Do Not Track would require Congressional action, and said he, for one, supports such legislation. The report is meant to be a guide for best practices in the industry, and also a guide to Congress as it considers legislation. The report will set the stage for a hearing on online privacy at the House Subcommittee on Commerce, Trade, and Consumer Protection tomorrow morning.

Leibowitz, a Democrat who was appointed as chairman by Barack Obama, made some comments that were clearly meant to head off possible Republican opposition, calling privacy “the most bipartisan of issues.” But there’s good reason to believe that opposition might form on the other side of the aisle. While Republicans have supported privacy in the abstract, they’ve also complained about the size and scope of government.

Plenty of incoming members in the House of Representatives have promised their constituents they will reduce the size of government, so it may be tough for them to support a bill that expands the mandate of a federal agency, and Leibowitz clearly envisions his agency being in charge of the new online privacy regime. This morning’s FTC press release emphasizes the agency’s historic authority in the privacy realm, calling it “the nation’s chief privacy policy and enforcement agency for 40 years.”

And while the FTC vote was 5-0 to approve the report, there’s even opposition to Do Not Track on the commission itself. Commissioner William E. Kovacic, a Republican appointed during the recent Bush administration, issued a concurring opinion calling the Do-Not-Track idea “premature” and suggesting more evidence is needed “for the proposition that consumer expectations of privacy are largely going unmet.”

The FTC is collecting comments on the proposal through January 31.

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