To Regulate Or Not To Regulate Online Advertising

How did we end up in a world where private companies want more regulation and the government wants less? If I understand this New York Times article correctly, that’s what’s happening:

The Senate Commerce Committee began Wednesday to look at how online companies collect and use data about Internet users for advertising, and was told by several big Internet companies that it needs to pass a new law to enforce privacy standards for a range of online and offline activites.
Privacy lawyers working for both Google and Yahoo both endorsed the idea of some kind of legislation. So did — predictably — Leslie Harris, the chief executive of the Center for Democracy and Technology, an activist group.
“Google supports the passage of a comprehensive privacy law that would establish a uniform framework for privacy and procedures to punish bad actors,” said Jane Horvath, a senior privacy counsel for Google. Mike Hintze, an associate general counsel of Microsoft, said much the same thing.
On the other side was the Federal Trade Commission. Lydia Parnes, the director of the commission’s bureau of consumer protection, said legislation is not needed and she defended the agency’s proposal late last year to bolster the industry’s self-regulation of advertising practices. That proposal suggests that one or more self-regulatory groups could define standards for disclosure of advertising practices, the consent users must give and the steps that companies that collect personal data must use to protect it from theft and accidental disclosure.

Seems that the big players–Google, Microsoft, etc–want Congress to establish some basic privacy statutes so the entire industry can play along. But the Bureau of Consumer Protection doesn’t seem to be all that interested in, uh, consumer protection.

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About Dan Goldgeier

Blogging on AdPulp since 2005, Dan Goldgeier is a Seattle-based freelance copywriter with experience at advertising agencies across the U.S. He is a graduate of the Creative Circus ad school, and currently teaches at Seattle's School of Visual Concepts. In addition, he is a regular columnist for TalentZoo.com. Dan published the best of his TalentZoo.com columns in a book entitled View From The Cheap Seats: A Broader Look at Advertising, Marketing, Branding, Global Politics, Office Politics, Sexual Politics, and Getting Drunk During a Job Interview. Look for it on Amazon in paperback and e-book editions.

  • correcto

    That’s not entirely accurate. The FTC is supportive of comprehensive privacy legislation, as are Microsoft, Google, and the CDT. The response you describe from the FTC about self-regulation pertained to the proposition of laws focused specifically on online advertising. The establishment of comprehensive privacy law would establish a base and avoid sector-specific regulation (and bring us in-line with much of the rest of the industrialized world), helping to give consumers a clear understanding of the conditions under which their personal information can be taken and how it may be used.

  • http://www.adpulp.com Danny G

    If I missed whatever the FTC proposed in terms of what you call “comprehensive privacy legislation,” then please provide that link to me.
    But this issue is about industry-specific legislation, and I’ll quote Ms. Parnes directly:

    On the other side was the Federal Trade Commission. Lydia Parnes, the director of the commission’s bureau of consumer protection, said legislation is not needed and she defended the agency’s proposal late last year to bolster the industry’s self-regulation of advertising practices. That proposal suggests that one or more self-regulatory groups could define standards for disclosure of advertising practices, the consent users must give and the steps that companies that collect personal data must use to protect it from theft and accidental disclosure.
    “The commission is cautiously optimistic that the privacy issues raised by online behavioral advertising can be effectively addressed through self-regulation,” she said.
    When questioned, Ms. Parnes declined to say when the commission plans to issue the final version of its plan, which will be voluntary.
    “I am reluctant to give a specific time frame,” she said. “We are moving quickly on this.”

    I’ve been in advertising long enough to know that “self-regulation” doesn’t add up to much, and certainly won’t be implemented by everyone–and definitely not in the Internet space.