Antitrust Law Daily Wrap Up, ADVERTISING NEWS: Ohlhausen Discusses Challenges Facing Online Behavioral Advertising and Self-Regulation, (Jun 7, 2013)

By Jody Coultas, J.D.

At the Digital Advertising Alliance’s First Annual Summit, Federal Trade Commission Commissioner Maureen K. Ohlhausen’s keynote address discussed online behavioral advertising and the importance of self-regulation to protect online consumers.

In response to the increase in e-commerce and the online marketplace, the FTC has brought enforcement actions as well as provided guidance and policy. Ohlhausen noted that the FTC has a long history of using its standards and authority to deter companies from misrepresenting its collection and use of consumers’ personal data, and to punish those that harm consumers. The FTC has also provided educational resources to businesses, held public workshops, and issued reports on online data collection practices.

Ohlhausen noted that, although she did not agree with the entire report, the Commission’s “Protecting Consumer Privacy in an Era of Rapid Change” provided many best business practices for protecting privacy. The report calls for companies to build in consumer privacy protections at every stage in development of their products, simplified choices for businesses and consumers, and greater transparency about the collection of personal data.

Using a number of consumer polls on the topic, Ohlhausen highlighted the difficulty faced by the FTC and businesses due to the variations among the public on the topic of privacy and personal data collection. While many consumers want all ads to be targeted to their interests, they also worry greatly about their privacy online. Ohlhausen stated that her position was “that consumers should have the options that comport with their privacy preferences.”

The remarks focused a great deal on the importance of continuing self-regulation to protect online consumers. “The best self-regulatory programs are nimble, keeping pace with rapid changes in technology and business practices in ways legislation and regulation cannot,” said Ohlhausen while noting the FTC’s support of industry self-regulation. The Digital Advertising Alliance (DAA) was lauded for its success in creating enforceable codes of conduct for its members, as well as its work on making enforcement a reality. The DAA has provided strong, objective oversight by the Council of Better Business Bureaus and the Direct Marketing Associations, and prompt follow up on complaints. Ohlhausen stated that this approach has built up the public confidence in self-regulation by providing a transparent record of the efforts undertaken to ensure compliance.

Ohlhausen urged stakeholders in the World Wide Web Consortium to create an international, industry-wide standard for Do Not Track. However, the focus should be on a voluntary, self-regulatory process rather than government involvement.

“I am also concerned that too often privacy is viewed solely as a consumer protection issue. [P]rivacy, like most issues under FTC jurisdiction, must also be viewed through a competition lens,” said Ohlhausen. Personal data protections could be a competitive advantage in securing business from those that are security conscious. FTC involvement in creating restrictions on the ability of companies to collect and/or disseminate information or on advertisers to access and use information to reach a target audience could be a hindrance on competition.

News: Advertising ConsumerProtection Privacy