Commentary Addressing Risks and Opportunities Through the Lifecycle of Data, Technology, Advertising and Innovation

Data Counsel

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<p>Last week we reviewed recent tracking litigation.&nbsp; As part of our ongoing focus on behavioral advertising, below is a summary of recent developments regarding Do Not Track legislation, industry self-regulatory efforts in the United States and abroad, and the FTC&rsquo;s plan to update its Dot Com Disclosures guidelines.&nbsp;&nbsp;&nbsp;</p>
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<li>FTC Commissioner J. Thomas Rosch, <a href="http://news.cnet.com/8301-31921_3-20095536-281/ftc-commissioner-calls-for-new-do-not-track-approach/">concerned</a> with the downsides of &ldquo;do not track&rdquo; such as loss of relevancy and free content, advocated for the FTC to learn more about current business practices before the FTC takes more regulatory steps.&nbsp; Commissioner Rosch suggested that information collected by the FTC could then be used to create whitelists and blacklists based on the categories of ad networks. "Such lists could be used by the do not track mechanisms being implemented by browsers," he said. </li>
<li>The FTC announced plans in May to update its Dot Com Disclosures guidelines, which were issued 11 years ago, to address social media, mobile devices and other newer platforms.&nbsp; The FTC received 40 comments.&nbsp; As some of the excerpts from the comments listed below highlight, because of the nature of the technology involved (smartphones, persistent cookies, aggregation, re-tweets), striking a balance between protecting consumers without unduly burdening the industry will be difficult: 
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<li>"The revised business guide should make clear that businesses should honor consumers' expressed privacy preferences, and that businesses should not use technical means of any kind to circumvent or otherwise make ineffective consumers' actions taken to protect their privacy. . . . A model disclosure approach would prohibit a website from using the term &ldquo;privacy policy&rdquo; unless that website&rsquo;s practices comport with common understandings of the protections that privacy policies offer.&nbsp; Specifically, if websites share personal information with third parties, their online disclosure of their practices should not be labeled &ldquo;privacy policy.&rdquo; . . . Over the next ten years, the major consumer protection problems with disclosure will surround two popular marketing techniques: the use of &ldquo;free&rdquo; and negative option offers.&rdquo; Chris Hoofnagle, director of the Berkeley Center for Law &amp; Technology's information privacy programs. </li>
<li>&ldquo;In the computing continuum world, the requirement for a &ldquo;clear and conspicuous&rdquo; disclosure means different things depending on the context. A statement from staff that any number of technological means, such as jump-linking or mouseovers or hyperlinks, would satisfy the disclosure requirement would help ensure that the agency&rsquo;s online disclosure guidance document can adapt to technological change and achieve appropriate consumer protection regardless of the device on which a disclosure is made. . . . Finally, we suggest that the staff examine how the use of dashboards affects a business&rsquo;s obligation to make disclosures or disclaimers. For instance, many consumers are aggregating information from a variety of sources onto dashboards, such as Mashable; as a result, consumers often are not even visiting the websites of individual businesses.&rdquo;&nbsp; Intel Corporation.</li>
<li>&ldquo;We ask that the Staff update the Dot Com Disclosure Guide to include representative examples of such alerts or cues as may be used within the different Web access channels, including representative examples that can be applied to the mobile environment, which is not well-suited to the disclosure methods recommended in the original Guide. For example, the Guide calls for providing explicit disclosures or instructions in the body of the message, yet this may not be possible or an effective means to communicate an important point due to a mobile device&rsquo;s smaller screen size or character limitations in the space provided in the medium. Further, consumers may not be well-served by scrolling through lengthy text to reach a disclosure at the bottom of a web page on a mobile device&rsquo;s screen.&nbsp; . . . Sprint would welcome guidance by the Staff as to examples of reasonable efforts that companies might take in providing material disclosures where the company&rsquo;s offer is re-posted, excerpted, and aggregated by third parties without the company&rsquo;s express knowledge or assent.&rdquo;&nbsp; Sprint Nextel Corporation</li>
<li>The Center for Democracy &amp; Technology "In response to a growing population of users who remove cookies and take other 'good housekeeping' measures for the express purpose of preventing tracking, many companies have devised new means for tracking users, some of which are impossible for users to block," the group wrote. "The Commission's updated guidelines should clarify that certain online data collection practices are considered deceptive and that participating companies should transparently explain their practices." </li>
<li>&ldquo;The Commission should promote broad general guidelines for advertising as a whole while letting the expertise within the industry develop the specific means of compliance.&nbsp; In the constantly evolving medium of interactive advertising, applying unique and highly proscriptive rules to certain media will restrict the entire advertising ecosystem, especially as advertisers increasingly incorporate many different advertising media into single campaigns. . . . Self-regulation continues to be the appropriate approach for addressing specific concerns with online advertising against the broader backdrop of general advertising principles promoted by the Commission.&nbsp; . . . Mobile marketing and advertising is a nascent industry that is just now beginning to enter the mainstream but has already become an important contributor to the economy.&nbsp; IAB cautions that rigid regulations at this time would be premature and could stifle the growth of mobile advertising.&rdquo;&nbsp; Interactive Advertising Bureau.&nbsp;&nbsp; </li>
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<li>The FTC announced in an August 15 advisory opinion <a href="http://www.ftc.gov/os/2011/08/100815cbbbletter.pdf">letter</a> that it does not have unfair competition concerns regarding&nbsp;the advertising industry's proposed online behavioral advertising self-regulatory &ldquo;accountability program.&rdquo; </li>
<li>The Article 29 Working Party, however, <a href="http://ec.europa.eu/justice/data-protection/article-29/documentation/other-document/files/2011/20110803_letter_to_oba_annexes.pdf">expressed</a> concern about online behavioral advertising industry proposals for obtaining consent to&nbsp;use cookies.&nbsp; The Art. 29 Party of data protection officials from the 27 European Union member states and representatives of the Internet Advertising Bureau (IAB) Europe and the European Advertising Standards Alliance (EASA) are scheduled to meet on September 14 to discuss online advertising issues, including efforts to comply with the 2009 amended EU e-Privacy Directive. </li>
<li>August 29 was the deadline for IAB members to implement the IAB&rsquo;s self-regulatory <a href="http://www.iab.net/media/file/IAB_Code_of_Conduct_10282-2.pdf">behavioral advertising guidelines</a>.&nbsp; </li>
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Focus on Behavioral Advertising, Part 2