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F.T.C. to Review Online Ads and Privacy
Whitney Chianese was exchanging e-mail messages with her mother a few weeks ago, discussing the recent death of her grandmother, when advertisements for health care products began popping up on her computer screen.
Ms. Chianese, who lives in Rye, N.Y., was taken aback, and realized she had been naïve in thinking her e-mail chat was as private as if they were sitting the couch of her mother’s home in Atlanta.
“It was like Big Brother,” said Ms. Chianese, 28. “It became too much. Is there a middle road? One needs to be found.”
Many people agree. The Federal Trade Commission will hold meetings today and tomorrow about online privacy. The questions they will entertain include how much control people need or want over the vast trove of information that corporate America routinely collects about people as they click from site to site on the Internet.
In advance of the F.T.C. meetings, a coalition of consumer groups called yesterday for a do-not-track list that would permit people to opt out of so-called behavioral tracking programs, which use data about a consumer’s Web travels to deliver relevant ads. Separately, the AOL division of Time Warner announced that it would enhance its system that lets people remove themselves from tracking databases. Opting out does not reduce the number of ads; instead people would receive generic ones.
Most Web tracking is done anonymously, and marketing firms are typically aware only of the sites someone has visited, not their name or address. But as Web tracking technology grows more sophisticated, experts on digital privacy say it is inevitable that marketers will know not only which sites somebody has visited, but also who is doing the Web surfing.
The developments raise new questions for consumers. Do people care if advertisers follow their digital footsteps as much they care, say, about telemarketers calling them during dinner? Will public anxiety mount as customized marketing makes its way to cellphone and television screens?
With the advertising industry increasingly placing its hopes — and money — in the behavioral field, privacy advocates argue that the government needs to establish guidelines for digital privacy now. “It’s a digital data vacuum cleaner on steroids, that’s what the online ad industry has created,” said Jeff Chester, executive director of the Center for Digital Democracy. “They’re tracking where your mouse is on the page, what you put in your shopping cart, what you don’t buy. A very sophisticated commercial surveillance system has been put in place.”
Internet advertising is just the latest flashpoint in the privacy debate. It has been eight years since the F.T.C. has held a public workshop on the use of consumer data in online ads, and a lot of the hypothetical situations described then are now a widespread reality.
Many executives in the advertising industry do not see anything wrong with online targeting. They argue that the practice benefits consumers, who see more relevant ads. And they contend that for consumers, relinquishing some innocuous personal data is a small trade-off for free access to the rich content of the Internet, much of which is ad-supported.
“Why should the direct mail firms be able to target like that, and we’re not? All because it’s electronic?” said David J. Moore, chief executive of 24/7 Real Media, which is owned by the advertising conglomerate the WPP Group. “Ultimately, if you want the content to remain free on the Web, you need to at least give us the information to monetize it.”
But there is growing concern, even among online companies, about what information is being used to deliver ads to people.
“The market is getting edgier and edgier, and what is accepted in the marketplace gets dodgier and dodgier,” said Martin E. Abrams, the executive director of the Center for Information Policy Leadership at the law firm Hunton & Williams, a research organization financed by companies like Google, Microsoft and Best Buy. “We have really moved to a world where we say consumers need to police the market, and, increasingly, it is a harder world to police.”
Some observers say that many people do not really mind the targeting. Recent privacy surveys have found that younger people do not care as much about privacy as their parents do, but privacy groups say that is because people do not understand how much information is gathered.
“If people were shown all the stuff that’s been collected, I think they would be more appalled,” said Richard M. Smith, an Internet consultant who will speak on the F.T.C.’s opening panel.
Ian Ayres, a professor at Yale Law School who has written a book about data mining, said, “If a computer is scanning my X-ray at an airport, I feel differently than if a human undresses me.”
Mr. Ayres cautioned that online data could be taken too far; companies could use it to discriminate against customers or charge wealthier ones higher prices. And because the Web is less transparent than a shopping mall, those actions might go undetected.
Behavioral targeting is not the only kind used online. Some companies scan e-mail messages and search queries to figure out which ads might be relevant to people. Google scans e-mail messages like Ms. Chianese’s message about her deceased grandmother — but only uses the most current ones in its tracking.
Facebook, the social networking site, is expected to announce an advertising policy soon that will deliver ads based on user information like college, friends, marital status and hobbies. The ad network 24/7 Real Media has been experimenting with linking offline ad databases to people’s computer addresses, though the company says it is not actually provided the names or addresses of people. Acxiom, a direct mail database company, said recently that it had begun selling such data to online companies.
Consumer groups seeking a do-not-track rule have a long wish list. They want disclosure notices saying that online ads resulted from behavioral tracking. They also want consumers to be able to view and edit the profiles the ad networks are building. Eileen Harrington, deputy director of the F.T.C.’s Bureau of Consumer Protection, said yesterday that “providing a consumer with advertising that matches their interests is something that provides a lot of value to consumers.” But, she added, “there are questions about whether it may also come with costs that consumers don’t want to pay.”
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