More Good Signs on Internet Privacy and Behavioral Advertising

This article in the New York Times about David C. Vladeck - the new head of the Bureau of Consumer Protection at the Federal Trade Commission (the agency that oversees online advertising) fits nicely with yesterday's post about Jon Leibowitz, head of the Federal Trade Commission. Both are Obama appointees, and each is demonstrating a far greater commitment to privacy than anything we've seen before.

As I reported yesterday, Leibowitz wants to terminate—or at least rein in— the delivery of ads to individuals based on the Web pages they visit and searches they carry out. Leibowitz has made behavioral targeting a top priority....even supporting the principle of "opt-in".

Now we have this good news about David Vladeck, who seems to be on the same page as Leibowitz. And here's what's most important for privacy advocates: Vladek is re-interpreting the current, accepted definition of "harm" - the industry's "go to" argument in avoiding any accountability for violating consumer privacy.

One of the continual roadblocks preventing individuals from holding businesses that violate their privacy accountable stems from the fact that they must prove actual "harm" done to them...which can be next to impossible when it comes to violations of privacy that don't necessarily result in someone stealing your identity or ripping you off.

This traditional roadblock, and accepted interpretation of "harm", is now being challenged! This could be a game changer in the fight to institute privacy protections that adequately keep pace with the rapid technological innovation and the accompanying reality that companies can now track nearly everything about nearly everyone.

The New York Times reports:

Most of the online world is based on a simple, if unarticulated, agreement: consumers browse Web sites free, and in return, they give up data — like their gender or income level — which the sites use to aim their advertisements. The new head of the Bureau of Consumer Protection at the Federal Trade Commission, David C. Vladeck, says it is time for that to change.

In an interview, Mr. Vladeck outlined plans that could upset the online advertising ecosystem. Privacy policies have become useless, the commission’s standards for the cases it reviews are too narrow, and some online tracking is “Orwellian,” Mr. Vladeck said.

After eight years of what privacy advocates and the industry saw as a relatively pro-business commission, Mr. Vladeck, has made a splash. In June, the commission settled a case with Sears that was a warning shot to companies that thought their privacy policies protected them. In just over six weeks on the job, he has asked Congress for a bigger budget and for a streamlined way to create regulations. And he said he would hire technologists to help analyze online marketers’ tracking.

...

Mr. Vladeck’s first moves have been to pick apart industry groups’ proposed self-regulatory principles and to meet with companies to discuss online ad guidelines. “The frameworks that we’ve been using historically for privacy are no longer sufficient,” Mr. Vladeck said.

...

He said his broad mission was to redefine how the commission looked at online privacy. Predecessors at the agency had different approaches to regulating online behavior, including whether companies were causing harm to consumers, and instructing companies to write privacy policies, Mr. Vladeck said.

The Sears case suggested that Mr. Vladeck had adopted a new approach. Sears had offered customers $10 to download software onto their computers, saying it would track their browsing. The commission said that the software also collected information like prescription records and bank statements. Sears settled with the commission in June.

It wasn’t a case that caused economic harm, though. Rather than taking money from consumers, Sears was paying them for the tracking. “Under the harm framework, we couldn’t have brought that case,” Mr. Vladeck said. (Though he hadn’t officially started at the commission, and the case was under way before he joined, he was consulting for it when the settlement was announced.) Now, Mr. Vladeck indicated, the commission would begin considering not just whether companies caused monetary harm, but whether they violated consumers’ dignity.

...

The changes Mr. Vladeck is considering could mean a different online world, where sites couldn’t depend on targeted ads to make money. But could a site refuse to allow access to people who wouldn’t hand over data?

Mr. Vladeck said that the commission would have to consider whether that meant businesses were treating consumers unfairly, but over all, he said he was not troubled by the problems this might pose for marketers.

Click here to read the rest of the article.

What can I say? This is truly exciting! I'm so used to reporting bad news I'm not sure how to react! :) Now let's see just how much push back Vladeck gets from big business...and how much that will water down what clearly are some very encouraging positions. I'm especially heartened by his clear reverence for the principle of privacy and deep understanding of how strict regulatory consumer protections will be required to preserve it in light of our modern, and rapidly evolving technological age.