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FTC's Vladeck: 'Lots of Concerns About Social Networks'

Data Security Is Top Priority; Praises Self-Regulatory Efforts So Far

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David Vladeck, the man in charge of policing the internet for the Federal Trade Commission, gave a presentation Monday at the Interactive Advertising Bureau's conference on networks and exchanges in New York. As director of FTC's Bureau of Consumer Protection, the former Georgetown Law professor is , perhaps, the central driving force within the agency for online privacy.

David Vladeck

Ad Age sat down with Mr. Vladeck to discuss Congress' latest privacy bills, the online advertising industry and social networks.

Ad Age : Tough questions first. To what degree would the Kerry-McCain privacy bill alter the FTC's current practice of pursuing those who impinge on people's privacy rights online?

David Vladeck: We support the goals of the legislation. The legislation seeks to, in some ways, effectuate what we've been talking about on privacy for a while. But the process will be a long one, and the commission has not taken a position on the legislation.

Ad Age : Same question about the proposed Do Not Track bill from Senator Rockefeller.

Mr. Vladeck: Again, the Commission has not taken a formal position. The majority of the commissioners have talked about the utility of do not track, and how it would be an important tool in providing better consumer choice. I think the commission is supportive of the goals of the legislation, but we have not taken a formal position.

Ad Age : Short of legislation, the FTC has done a pretty good job of pursuing companies who violate their own privacy terms of service (such as in the case of Google). You're using the framework of --

Mr. Vladeck: Deception, right.

Ad Age : But then isn't it simply a matter of a company not making any claims to protecting a user's privacy in its terms of service? Wouldn't that release them from FTC scrutiny on that score?

Mr. Vladeck: It's not so clear that if they do that they're necessarily going to avoid us. First, there are states that require privacy. California does. And we do bring unfairness cases, and we do bring half-truth deception cases, and so the absence of a privacy policy would not necessarily immunize a company from enforcement.

Ad Age : Putting aside the Kerry-McCain privacy bill of rights, and the Rockefeller Do Not Track bill, what would make a good legislative framework for the FTC?

Mr. Vladeck: One thing I have to bring up, if you look back at our privacy report, one irony we're amused by , that no one else seems to get, do-not-track was a paragraph in a very long report that worries about a whole host of things.

Just from my own standpoint, legislation may be helpful, but we have seen a lot of movement from the industry on this issue. Who would have known in December that by May 16 each of the browser manufacturers would have come up with real innovations in tracking, and the advertising industry would come together and help on transparency? And the icon, whatever else you want to say about it, is going to tell a lot of people out there if there's tracking going on, and they can control it -- maybe not completely the collection [of data] but at least the use of it.

If there's legislation, sure, we'd like the baseline like in Kerry-McCain, that would be helpful. We think it would be helpful to have more authority on Do Not Track. And with data breaches and data security, we've been on record that we need civil penalties. What people are forgetting is there is more than one way people's privacy can be breached. One of them are data breaches. If you ask what our legislative agenda on privacy is , it's data security, data security, data security. Somehow the Do Not Track debate has crowded out what are really important issues.

Ad Age : You mentioned the icon, which is the ad industry's self-regulatory privacy initiative. How well is it working or not working?

Mr. Vladeck: I'll tell you in three or four months. It's just literally now being rolled out. It'll be interesting to see the consumers' responses.

Ad Age : In three or four months, what will you be looking for? How will you evaluate the program?

Mr. Vladeck: Are consumers clicking through to see what's going on there? Are they exercising choice? If so, how? We want to see how it plays. This is all new. I want to give credit to the industry for moving forward on this, but there's no guarantee that it'll work.

Ad Age : If at that time, however, the self-regulatory program is not moving in the right direction as far as the FTC sees it, what then?

Mr. Vladeck: I don't know. I think we'd sit down to see if we can tweak this, if we can improve it. Maybe there are some technical issues. It's an intelligent question that presumes a greater sense of the likely outcome here. We just don't really have that .

Ad Age : Will you also be evaluating the browser manufacturers' do-not-track features?

Mr. Vladeck: We encouraged the browser manufacturers to talk to the advertisers. What we'd like to see is for people to have nuanced do-not-track options. If my choice is ads or targeted ads, I want targeted ads so long as I know the information is being collected for ad delivery, not for some secondary uses undisclosed to me. And second, I have some control so I don't keep getting those damn Rogain ads. Because there are subjects of sensitivity to some people.

Ad Age : How is the FTC evaluating social networks?

Mr. Vladeck: I think there are lots of concerns about social networks. What are apps pulling down, how clear are consents for that ? Fidelity to privacy policy. People have expectations with regard to controlling and sharing when we join social networks. You want to be able share information with people they want to share with -- they don't necessarily want to share with the world. Those are dicey questions that social networking sites are trying to grapple with. And you see them to some degree social networking sites that depend on your geo-location. There's more sharing there than the consumers expect.

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