Web Privacy Policies Need Transparency, Say Heads Of FTC, FCC

By Rob Sanna - Talk Radio News Service

 The men in charge of both the Federal Trade Commission (FTC) and the Federal Communication Commission (FCC) told members of the Senate Committee on Commerce, Science, and Transportation on Tuesday that customers should be able to “opt-in” to information tracking when shopping on the internet.

Under current information tracking systems, consumers must “opt-out” of privacy policies or disable internet tracking devices called cookies. Unless consumers spefically tell internet service providers they do not want to be tracked, their internet activity is recorded.

“For vulernable populations and sensitive information, we have said that those should be ‘opt-in’ rather than ‘opt-out,’” said FTC Chairman Jon Liebowitz. “In terms of informing consumers and protecting their privacy…’opt-in’ is a much better approach.”

“There’s a huge disconnect between what consumers think happens to their data and what really happens to their data. Most consumers believe that a privacy policy protects their privacy, instead, a privacy policy delinates their rights and their lack thereof,” he added.

Members cited the example of a British gaming company called Gamestation, who included a clause in their terms and conditions which forced customers who agreed to “surrender their eternal soul” to Gamestation.

According to Leibowitz, most consumers did not opt out of this clause, even when provided with a rebate incentive. This, he said, demonstrates that people do not read privacy policies, and that the policies do not protect people adequately.

“In order to get the economic benefits of broadband, tele-health, and education, people need to be confident that the internet is a safe, trustworthy place,” said FCC Chairman Julius Genachowski. “The more people have the concerns that we’re hearing today, the less likely they are to take advantage of this medium.”

Targeted Internet advertising hits the bullseye, but misses privacy

The Senate Committee on Commerce, Science, and Transportation held a hearing on the privacy implications of Internet advertising. Advertising targeted to consumers’ interests was most discussed. Lydia Parnes, the Director of the Bureau of Consumer Protection at the Federal Trade Commission said that the implications of online advertising are very complex, but the Commission is hopeful that the industry can self-regulate, meaning federal intervention may not be necessary.

By contrast, Leslie Harris, the President and Chief Executive Officer at the Center for Democracy and Technology said that self-regulation does not work. Clyde Wayne Crews, Jr., the Vice President for Policy and Director of Technology Studies at the Competitive Enterprise Institute said that although there is a market for anonymity, the Internet is not the network for privacy. He said that because of targeted advertising, ads are now relevant. Mike Hintze, the Associate General for Counsel, Legal, and Corporate Affairs at Microsoft Corporation, said that $21 billion were spent last year on online advertising because it is interactive, targeted, relevant, and beneficial to advertisers because the targeted groups are more likely to buy the product.

Chris Kelly, the Chief Privacy Officer at Facebook Incorporated said that all of their users have very easy access to privacy settings to make sure they control what information they share and who they share it with. He said that targeted advertising benefits users, but personal information is not given. Robert R. Dykes, Chairman and Chief Executive Officer of NebuAd Incorporated said that in his business, Internet users can opt out of the ads, but their personal information still streams through their system. They have no identifiable information like names or IP addresses.