Privacy groups call for full disclosure

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Jason Catlett, president of Junkbusters, a for-profit consumers group that also consults on Internet privacy issues, is one of the principal consumer advocates on profiling issues and has led consumer groups in opposing the merger of the DoubleClick online ad network and Abacus Direct Corp., a direct marketing company. Abacus agreed to be acquired by DoubleClick in August in a stock transaction valued at $1 billion.

At today's joint Federal Trade Commission and U.S. Department of Commerce workshop on profiling, Mr. Catlett and the Electronic Privacy Information Council will vociferously call on the FTC to examine policy implications of profiling by advertisers and third-party Web ad servers. They will also encourage the government to either limit or fully disclose profiling.

Advertising Age: What action do you hope the FTC takes on profiling?

Jason Catlett: We are going to come out with a specific position [today], but privacy advocates want fair information practices. That means only collecting information about people with their consent, letting consumers see information collected and letting them edit it or delete it.

AA: In your prepared comments, you called profiling Orwellian. Can you explain that?

Mr. Catlett: George Orwell's "1984" described a world where each home had a televisionlike device that actually watched what individual citizens were doing. That is what ad networks have turned consumer PCs into, except that most consumers still have to pay for the hardware.

AA: One of the other issues you mentioned is profiling of visits to adult sites. If ad profilers agreed to not gather information from adult sites or medical sites, would that meet a large part of your concerns?

Mr. Catlett: I am not a fan of carving out sensitive areas. If a person is reading a particular newspaper article about incontinence, it is difficult to assess whether [the content] is related to an ailment.

If they are building a database, it should not be a secret and the consumer should be able to have some control. The obvious thing is to have a flush button (to remove personal information), but it may be preferable from the companies' viewpoint to have a line-item veto.

AA: You have urged federal regulators to reject DoubleClick's proposed merger with Abacus Direct because of concerns that it would allow DoubleClick's online database to merge with Abacus' offline information. Why are you speaking out so forcefully on the profiling issue?

Mr. Catlett: The fact that the advertising industry is rushing towards gathering personal information makes the public policy question urgent.

A lot of companies are developing anonymous profiles based on interest vectors that are associated with a cookie. It's a lesser evil than personally identifiable information, but it's still problematic because people aren't aware of it and can't control it.

When it becomes personally identifiable is when I have the most problem.

AA: While you have acknowledged that advertising provides support for Web sites, you have suggested that profiling isn't necessary or even logical economically.

Mr. Catlett: Most sites are put up by businesses because they want to reach existing customers. If there were no ads on the Web, Bank of America, AT&T and United Airlines would still have Web sites. The media sites subsidized by advertising also have revenue from sponsorships.

The marginal utility from targeting via profiles is small compared to the tremendous damage that will be done to the medium when consumers find it has been spying on them.

AA: So what is the government's role in all this?

Mr. Catlett: My view is that the government should minimize the standards of fair information practices. [Last week's] problems with RealNetworks are an illustration that you can't leave this to self-regulation. (Editor's note: RealNetworks last week issued a privacy patch for its RealJukebox software for playing CDs on computers after the company came under attack in a story in The New York Times for collecting information about consumers without their consent.) Seal programs (such as those offered by TrustE and the Council of Better Business Bureaus' BBB Online) are not working. They are not providing real privacy.

Copyright November 1999, Crain Communications Inc.

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