FTC Plans New Look at Privacy and Ad Disclosure

Location Tracking Notices and Privacy Language May Be on the Agenda

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FTC headquarters in Washington, D.C.
FTC headquarters in Washington, D.C. Credit: Andrew Harrer/Bloomberg
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The Federal Trade Commission is seeking presenters for a public workshop in September on disclosures in advertising and ad-related privacy notices to consumers.

While it remains unclear exactly which subjects will be discussed, expect discussion around location tracking notifications and the ad industry's approaches to privacy disclosure and consumer opt-outs such as the Digital Advertising Alliance's Ad Choices icon.

"We don't have a specific agenda at this point as to what exactly we'll address, but understanding how consumers perceive disclosures and what they learn from disclosures is certainly relevant," said Lorrie Faith Cranor, the FTC's chief technologist. The workshop will be held Sept. 15 in Washington, D.C.

"Our real interest is in understanding best practices and approaches for evaluating disclosures," Ms. Cranor said. "We want to encourage companies and organizations to do this evaluation before they put out disclosures to consumers."

Though Ms. Cranor said privacy policies and disclosures will be of particular interest at the event, participants will also discuss how companies can use disclosures to avoid deceptive advertising claims in endorsements as well as claims related to the environmental impact or fuel economy of products.

The agency has tackled privacy issues in the past, but has recently been increasing pressure on the ad industry and the data technology sector serving it. In November, FTC Chairwoman Edith Ramirez was critical of online and offline ad industry tracking and data linking, particularly industry language often used in privacy policies and disclosures stating that companies deal only with anonymized or non-personally-identifiable data.

"They do this under the veil of anonymous identifiers and hashed P.I.I. [personally-identifiable information], but these identifiers are still persistent and can provide a strong link to the same individual online and offline," Ms. Ramirez said at the time.

The subject of anonymization and use of language referring to anonymized data could be discussed at the workshop. "There are a lot of disclosures that do make some claims about anonymized data," said Ms. Cranor, adding that the agency is interested in having people who have evaluated such claims speak at the workshop.

The ad industry's approach to data tracking privacy and opt-outs will also be a topic of conversation, though the FTC's notice about the workshop did not refer specifically to the Digital Advertising Alliance's widely-adopted triangle-shaped Ad Choices icon linking digital ads to an opt-out mechanism. The Digital Advertising Alliance is backed by other industry groups such as the Association of National Advertisers, the American Association of Advertising Agencies and the Internet Advertising Bureau.

"I expect that Ad Choices is among the things that will come up, but we don't have specific plans to talk about Ad Choices," said Ms. Cranor.

Representatives of the commission have suggested that the Ad Choices program could be improved. Earlier this year, exiting FTC Commissioner Julie Brill told Ad Age that the Digital Advertising Alliance could improve the AdChoices privacy program.

"I've long said that I don't think consumers understand it," she said. "I don't think they interface with it," she added. "When you do interface with it, it's clunky. I'm glad it exists but I think it could be vastly improved."

"The DAA has always worked closely with the FTC and other policymakers on our independently-enforced self-regulatory efforts, and we look forward to continuing that close collaboration on this and other issues in future," said Lou Mastria, executive director of the DAA.