Where FTC Fits in D.C.'s Brewing Privacy Battle

Jon Leibowitz Wants Targeting Opt-out but Is Agnostic on How It's Implemented -- and Probably Wouldn't Use It

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Online privacy has lately become a policy darling, as two new pieces of proposed legislation make the rounds of Congress, with more to come, and the Obama administration has stepped into the fray with the Commerce Department's recent report on digital privacy and protection.

But the Federal Trade Commission has been looking at the issue the longest -- and will most likely continue to act as the de jure enforcing entity for consumer protection online. We talked to Chairman Jon Leibowitz about the ad industry's self-regulatory program and where the FTC fits into the legislative proposals brewing in Washington.

Jon Leibowitz
Jon Leibowitz Credit: Andrew Harrer/Bloomberg

Ad Age: What areas are top of the list in terms of FTC's concerns? Essentially, what are the most egregious behaviors right now?

Jon Leibowitz: I would say we remain very concerned about the protection of sensitive information. We had a consent order against some company called EchoMetrix. They sold parents monitoring software so you could watch your children's online behaviors, and they sold the information to third parties without telling the parents! That is the kind of stuff that's very troubling. It's just one example of the broader problems within the industry.

That said, the browser vendors and the ad companies and publishers have improved their transparency and consumer-choice offerings. But one other area we are concerned about is the information brokers that collect consumer information from a variety of sources, but don't interact directly with the consumers whose information they possess.

Ad Age: The online-ad industry's Digital Advertising Alliance launched a consumer program called AboutAds.Info. What are your thoughts on their progress?

Mr. Leibowitz: My sense is that the DAA has made important progress since our report was issued in December, and we understand the icon they've developed is gaining broader acceptance. They are ramping up to establish their enforcement scheme.

Ad Age: Lee Peeler, CEO of the National Advertising Review Council, which is enforcing the industry's self-regulatory program, said they're working closely with the FTC. What is your confidence level in the proposed measures? And do you have a timeline for evaluating the industry's progress?

Mr. Leibowitz: Lee is a former and longtime FTC attorney, and I think we want to be confident that that's a system that will work. I don't know if it will work. But we're certainly pulling for them.

In our enforcement capacity we're prone to deadlines. In our policy work, I don't think we do that. We'd like to see them ramped up with a workable and successful program that will let consumers block the tracking, and not just the delivering of the ads. And with all deliberate speed.

Here's the thing. ... It's a dynamic industry, and we want to make sure we'll get it right. From my own perspective, I probably wouldn't mind being tracked most of the time. I think there's a benefit to behavioral ads. It's about giving the consumers a clear, transparent and persistent ability to keep from being tracked if they want.

Ad Age: Congress and the Obama administration are taking a front-and-center approach to online privacy. Where does the FTC fit in? What about Do Not Track legislation?

Mr. Leibowitz: We've had experience in privacy at least going back to the 1970s, and we're going to play that major enforcement role in privacy moving forward. The involvement of the Commerce Department is very much welcomed. We work with them on a whole host of issues. It's a very productive relationship.

We haven't taken a position on a need for do-not-track legislation. We've indicated a universal choice mechanism for online behavioral tracking. Speaking for myself, we're agnostic as to how it's implemented.

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