Recent Activities in the Online Behavioral Advertising Privacy Sphere

There’s been a flurry of activity in recent weeks related to the privacy concerns of online behavioral advertising.

Earlier this month, TRUSTe released a whitepaper designed to help online businesses assess and better understand their own privacy practices related to data collection and retention. The intent is to help these companies better demonstrate transparency — and better meet consumer expectations — related to their behavioral advertising data practices.

Central to this effort is TRUSTe’s “Checklist for Businesses” which walks businesses through a series of questions to help them understand their own business operations and build privacy compliance and risk mitigation measures into their design as they relate to behavioral advertising activities. It is a pretty good list of issues that any online company should (already) be paying attention to.

One item that stands out to me relates to providing more transparency for users, where TRUSTe suggests providing a link alongside targeted adds stating “Why this ad?” Or “How data about your activity here will tailor the ads you see.” Such visible and proactive disclosure would go much further to educating consumers than language buried in a hard-to-find privacy policy.

The FTC appears to agree. Last week, the FTC released an update to its principles for online behavioral advertising, condemning Internet companies for not explaining to their users clearly enough what information they collect and how they use it for targeted advertising. Saul Hansell at the NY Times provides a nice summary of the Commission’s critique:

  • Privacy policies are not a good enough way to tell people what information is being collected about them.
  • The privacy of users is not necessarily protected because a system doesn’t capture names or other “personally identifiable information.”
  • The industry’s self regulation has not been adequate.
  • Internet companies have not cooperated with the commission to provide enough information on what is happening now with data about users.

Similar to TRUSTe’s recommendation noted above, the FTC calls on online companies to “design innovative ways – outside of the privacy policy – to provide behavioral advertising disclosures and choice options to consumers.”

According to the NYTimes coverage, Yahoo is already experimenting with providing users more information about targeted advertising. As you can see from the sample below,  a notice placed is placed above Yahoo ads that appear on eBay. Click on the word “about” over the ad and you’ll see this disclosure with an option to disable targeting. (Apparently Yahoo hasn’t expanded this beyond the eBay ads).

Despite recommendations like this, and the overal stern tone of the report, the FTC seems to be (at least for now) maintaining faith that the Internet industry can voluntarily regulate its own privacy practices. As Jules Polonetsky, the co-chairman of the Future of Privacy Forum, explains, “The commission is saying you have one last chance before I come upstairs and take your toys away.”

We’ll see how much patience the FTC has, and whether the toys will get thrown into the closet anytime soon.

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