An Internet Self-Regulation Tool for Consumer Privacy

A good deal of progress is being made to balance the needs for consumer privacy, behavioral advertising, and internet innovation. Today, USTelecom hosted a panel event discussing important ways to balance a consumer’s right to online privacy while still enabling advertisers to gather data to target consumer buying needs and wants. The discussion began with an overview of online advertising and the ways it has evolved throughout the years to a rather complicated structure involving hundreds of third party groups.

USTelecom’s VP and General Counsel Genie Barton moderated the panel which included the following presenters: Stuart Ingis, Partner, Venable LLP and counsel to the Digital Advertising Alliance; Christopher N. Olsen, Assistant Director – Division of Privacy and Identity Protection, Federal Trade Commission; Colin O’Malley, Co-Founder, VP Business Development and Policy, Better Advertising; Kathleen Zanowic, Chief Privacy Officer, Verizon.

Since new questions began to arise over privacy, the FTC along with a group of associations and companies involved in the advertising industry met about how best to keep consumers in control to make choices about how their personal information is gathered and used online, while still allowing information to be gathered in a transparent environment. While the FTC was holding a series of roundtables to gather input on the issue, industry began work on a self-regulatory process that resulted in the creation of a new industry-standard icon that will appear at the corner of web pages where data is collected. Consumers can click on the icon and be taken to an “opt out” page. This page will allow consumers to edit what information, if any, the page is allowed to collect.

The industry is investing in tools to ensure transparency for all consumers and a platform to build trust with its clientele. Many sites have placeholders for this new icon, although the complicated technology behind it is still being worked out. According to panelist Colin O’Malley, by the summer of 2011, four to five million site pages will host this icon. Early tests seem to illustrate that the icon exemplifies trust for consumers who are adamant that their personal information be kept safe. People are engaging with the icon and 36 percent of users are more likely to buy from a site that hosts the icon. The current “opt out” rate is very low.

Concerns over the length of time the self-regulation icon is taking to formally post, along with questions about how this entire idea will properly work, are still floating. And steps to regulate advertising practices are ongoing. The FTC and Department of Commerce will both be issuing a report by year’s end that proposes a new privacy framework to give consumers greater control over their online data.

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