"Do Not Track"
Internet spat risks legislative crackdown
By Jasmin Melvin | Reuters
– 21 hours ago
WASHINGTON (Reuters) - The
White House wants a "Do Not Track" option put on websites to give
consumers greater control of their personal information online but Internet
companies and privacy groups are at odds on how tight the controls should be.
The stalemate could lead
to a legislative crackdown on Internet privacy if left unresolved.
That has firms like Google
Inc and Facebook Inc that rely heavily on collecting user data worried that any
legislation could lead to cuts in online advertising that would eat into their
profits.
The U.S. administration
has looked to an Internet standards setting body, already eyeing a "Do Not
Track" mechanism and with an aggressive timeline in place, to corral
everyone into a room and onto teleconferences to reach a deal.
With over 10 months of
talks under the group's belt, they are still talking but are arguably no closer
to an agreement than when they started. The sides are so far apart that they
don't even agree on what "Do Not Track" means.
To privacy advocates, it
is halting data collection so a consumer can surf the Web without any prying
eyes collecting information about their online activities for economic gain. To
the industry, however, it means not targeting ads to a consumer based on their
Web viewing history, but data collection would continue for other purposes.
The next step, if no
consensus is reached by year's end, will likely test regulatory and
congressional threats of legislation to enforce Internet privacy.
This puts Internet
companies in the midst of an existential dilemma as their business models rely
on consumers parting with their personal information to bolster ad revenue.
"We want to reduce
the profile, the data footprint of citizens who increasingly spend a lot of
time online today," said Jeffrey Chester, executive director of the Center
for Digital Democracy, a nonprofit active in policing privacy.
Online advertisers and Web
companies say such data is now the lifeblood of the Internet.
"If you get rid of
that, you kill the Internet. It's just that simple," Linda Woolley,
executive vice president of government affairs at the Direct Marketing
Association, said of the dangers of ceasing data collection.
What some once viewed as a
sideline - collecting and selling consumers' data to advertisers - the Internet
ecosystem took on as its main source of revenue, in return providing consumers
with free Web content and services.
With more sophisticated
data mining, more prevalent ad targeting and more cognizant Internet users,
companies are starting to see fallout from this relatively novel way of doing
business.
Any clamp down on data
collection deals a blow to their bottom lines. Targeting has almost tripled
what brands pay websites to run ads, and companies like Google and Facebook
rely heavily on advertising for the bulk of their revenue.
U.S. online ad revenue was
just shy of $15 billion in the first half of 2011, 23 percent higher than the
previous year.
Yet abuses in which
companies are not honest about how they exploit their users' movements on the
Internet threaten to drive users away, another hit to revenue.
"If you have a
business model that relies on spying on your customers, as people begin to
understand that, there will be tremendous push back," said John Simpson,
privacy project director for the nonprofit Consumer Watchdog.
HOW WE GOT HERE
Some browsers, including
Mozilla's Firefox, Microsoft Corp's Internet Explorer and Apple Inc's Safari,
allow consumers to indicate that they do not want to be tracked as they surf
the Web. But under current regulations, websites and advertisers can ignore
these requests.
The Obama administration
has called for a universal "Do Not Track" system with industry
buy-in.
The concept has floated
around since consumer groups asked the U.S. Federal Trade Commission(FTC) in
2007 to create a "Do Not Track" list for online advertisers, which
would work like the "Do Not Call" registry that caused telemarketing
industry havoc.
The FTC first endorsed a
"Do Not Track" tool that would convey directly to websites the user's
choice to opt out of tracking in a preliminary staff report released in
December 2010.
In recent years Internet
giants have gotten into trouble for various privacy abuses, including secretly
tracking users' locations and selling consumers' data to advertisers without
their knowledge. Both Google, the world's No. 1 search engine, and Facebook,
the No. 1 social networking site, reached settlements with the FTC last year
because of privacy problems.
The faux pas got
regulators' attention. The White House and FTC unveiled privacy frameworks
earlier this year to curtail abuses, but they relied heavily on voluntary
commitments by industry players to responsibly and transparently handle
information about the online activities of consumers.
The frameworks came with a
caveat: "We are confident that consumers will have an easy to use and
effective Do Not Track option by the end of the year because companies are
moving forward expeditiously to make it happen and because lawmakers will want
to enact legislation if they don't," FTC Chairman Jon Leibowitz said in
March.
The administration is now
looking to the World Wide Web Consortium (W3C), an international standards
organization for the Web, to produce a "Do Not Track" tool by year's
end.
The group began talks with
Internet firms, online advertisers and privacy advocates last September to
define how a "Do Not Track" mechanism would work.
The added pressure from
regulators in March has not triggered agreement. Instead, two very different
visions have emerged - do not collect versus do not target ads.
The W3C wrapped up what
was supposed to be its fifth and last face-to-face meeting of its Tracking
Protection Working Group on June 22. With no consensus reached, the W3C has
extended the group's charter. Weekly conference calls resumed in July with another
face-to-face meeting likely in the fall.
TWO DIFFERENT VISIONS
Industry heavyweights say
the Obama administration's push for a clear tool to opt out of tracking should
only give consumers control over the type of advertising they receive.
Restricting data
collection further could cause the Internet to go dark and undermine the
economic health of companies, industry leaders argued at the June W3C meeting.
Advertisers point to a
self-regulatory program already followed by 90 percent of the ad industry that places
an "icon" on ads consumers see due to behavioral advertising.
Clicking the icon directs
consumers to a website that explains why they received the ad and gives them
the option to opt-out of receiving the company and ad network's advertising. It
does not stop data collection, only its use for targeted ads.
A coalition of online
advertisers in February said its members would honor these "Do Not
Track" requests. Twitter in May said it would support a standardized
initiative to honor requests from users who do not want to be tracked.
Yet still there is no
consensus on what "Do Not Track" means.
The leading "Do Not
Track" proposal from the Internet industry - prepared by representatives
from Google, Yahoo! Inc and consultants - would bar companies from using
consumers' personal information to target advertising to them across multiple
websites if they opted out of tracking. It would, however, allow them to keep
collecting data.
Privacy advocates said the
industry proposal is little different from what companies are subject to now -
a problem, they say, given continued reports of misuse of consumers' data.
Consumer advocacy groups
and others noted charges that Google used special computer code, or
"cookies," to trick Apple's Safari browser so Google could monitor
users who had blocked such tracking and other reported privacy violations to
help make their case for stronger protections.
Last month they harped on
findings that data collection allows the travel site Orbitz to identify if a
user is on a Mac or PC. The online travel booking company last year began using
that data to recommend pricier hotel rooms to Mac users as studies show Mac
users on average are more affluent and willing to pay for more expensive hotel
stays.
Simpson said industry's
proposal would do nothing to prevent a user that does not want to be tracked
from having their personal information used to tailor what pricing on a website
is more dominantly displayed to them.
A proposal from privacy
advocates, written by the Electronic Frontier Foundation, Mozilla and Stanford
University student Jonathan Mayer would bar third parties - companies with ads
displayed on a page or ad networks that track users across unrelated websites -
from collecting information about a user if they opt not to be tracked with
limited exceptions like security and fraud prevention.
Advocates said their
proposal would still allow companies that users have a direct relationship
with, such as when logged into Amazon.com or YouTube, to collect personal
information in order to give recommendations and otherwise tailor a user's
experience.
"If we can't get a
reasonable agreement very soon, consumer groups are going to go to the FTC and
the European Union and Congress and say Do Not Track is dead on arrival and we
need legislation and regulation," Chester said.
A STALEMATE RISKS
LEGISLATION
European Union proposals
that would give Internet users the right to bar any collection of personal data
are also putting pressure on U.S. officials to beef up privacy safeguards.
Leibowitz has been adamant
that "Do Not Track" should mean do not collect data, with some narrow
exceptions like fraud prevention.
"How exactly to get
to that goal is still under discussion, but my sense is if there's not a
resolution from the discussions, then Congress may take a look at the
issue," said Ed Felten, the FTC's chief technology officer.
The specter of legislation
this year is generally viewed as a hollow threat given the tense, gridlocked
legislative landscape. But Washington insiders say pressure from the European
Union and an escape from election-year politicking will greatly increase the
prospects for a bill to move next year.
Representatives Edward
Markey and Joe Barton, co-chairmen of the Congressional Privacy Caucus, wrote
to the W3C last month championing a "Do Not Track" definition that
bars accumulating, using and sharing personal data.
"Joe Barton is one of
the most conservative Republicans in the House of Representatives, and Ed
Markey is one of the most liberal," said Consumer Watchdog's Simpson.
"The fact that those two guys can come together on this leads me to
believe that privacy is likely to be one of the issues where there will be
bipartisan agreement about the need to do something."
(Reporting By Jasmin
Melvin; Editing by Andrew Hay)
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