FTC EXPANDS PROBE OF PRIVACY ISSUES: PLAN FOR HEARINGS RAISES CONCERN OVER EFFECT ON DATABASE MARKETING

By Published on .

Most Popular
The Federal Trade Commission is greatly expanding its look at privacy issues and taking big steps toward examining some data collection practices that are among the foundations of database marketing.

While FTC officials said the agency's interest is in individual personal information made available to the public and gathered without the individual's knowledge of its use, there were concerns last week the examination could affect database marketing.

`THIS IS MORE SERIOUS PHASE'

"This is a more serious phase of the process," said Dan Jaffe, exec VP at the Association of National Advertisers. "What they are doing is extremely detailed, and they've scheduled four days of hearings. That's a lot of time, manpower and money."

The Direct Marketing Association expressed confidence the FTC would listen to all parties.

"Clearly, we are concerned about the expansion and what happens to the information used for marketing purposes," said Jerry Cerasale, DMA senior VP-government affairs. "The history of the FTC, however, is evenhanded on this particular issue. We have confidence they will have a reasonable approach."

The FTC has been examining privacy issues for more than a year; a workshop nearly a year ago focused on disclosing to consumers the planned use of data gathered at Web sites and, at sites aimed at kids, limiting information that could be gathered and sold without parents' knowledge.

Last week, in announcing the hearing slated to begin June 11, the FTC said it would review progress of the online industry since then, and also take up several senators' request to add privacy issues publicized last year after Lexis-Nexis offered a Web database allowing consumers to quickly obtain other consumers' Social Security numbers. (Lexis-Nexis quickly removed that part of the database.)

FTC'S NEW CONCERNS

The FTC said its new concerns include unsolicited e-mail and the ready availability of personal information ranging from Social Security numbers to driver's license data in "look-up" Internet and CD-ROM products. The agency will issue a report to Congress on database privacy, while looking at the possibility of enforcement action on some online issues.

"The commission's [congressional] study will focus on sensitive, identifying information about consumers that is gathered, compiled and sold without their knowledge or consent," FTC Chairman Robert Pitofsky wrote in a letter to Senate Commerce Committee Chairman John McCain (R., Ariz.).

Mr. Pitofsky said the expansion stems from congressional concern about the Lexis-Nexis issues and the availability of other personal information on physical characteristics and property holdings.

Congress in 1993 required states to give drivers the choice of not having their license information sold to marketers. The requirement takes effect Sept. 30.

In this article: