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ICSC PUBLISHES PRIVACY WHITE PAPER
WITH LEGISLATIVE UPDATES
IICSC Members and members of the U.S. Congress will shortly be receiving an updated version of the Council’s White Paper on pending initiatives on protecting consumers; online privacy.
An earlier version of this paper, entitled A ‘NO TRACKING’ MODEL OF ONLINE ADVERTISING: CONTENT SYNDICATION was published on the ICSC website on March 14. It analyzed the recommendations of the Federal Trade Commission’s Staff Report on Privacy, issued in December, specifically with regard to their potential impact on the use of Behavioral Tracking in online marketing campaigns. It detailed the recommendation of the creation of a “Do Not Track” mechanism – described as “the placement of a persistent setting, similar to a cookie, on the consumer’s browser”—to allow consumers to opt out of having their personal information used for marketing purposes.
The White Paper noted that the “Do Not Track” movement is likely to gain momentum in 2011 and suggested that marketers who incorporate behavioral tracking into their campaigns should prepare for this by seeking alternatives. Content Syndication is a particularly appropriate alternative because it offers advertisers the opportunity to place their ads in broadly-distributed content which can attract highly-targeted audiences due to its subject matter. This is a form of contextual advertising which the FTC report endorsed as an approved, “commonly accepted practice” which does not rely on invasive techniques.
Since the original publication of the White Paper there has been considerable legislative activity on online privacy, with four bills currently in committee. For this reason the ICSC is reissuing it with an appendix, which reviews and summarizes these bills with respect to the “Do Not Track” initiative and discusses the issues likely to surface as they move forward.
All of the bills appear to take cognizance of the FTC Staff Report, and most of them, if passed, would direct the FTC to pass rules regulating online privacy. In brief, the bills are:
- The “Do Not Track” Online Act of 2011 (S.913) -- A Senate bill introduced in May by Sen. Jay Rockefeller, Chairman of the Commerce Committee. It is a simple, straightforward bill that calls for the FTC to set standards for a “Do Not Track” mechanism and to require marketers stop collecting data from those consumers who opt out. It does not allow for industry self-regulation as an alternative, and it sets a stiff penalty (up to $15 million) for violations. It also allows states to bring suits against marketers.
- The Commercial Privacy Bill of Rights Act of 2011 (S799) -- A Senate bill cosponsored by Sens. Kerry and McCain. Broader in scope than the Rockefeller Bill, it calls for the FTC to make rules requiring companies to protect consumer data from
theft and fraud and states that companies should keep no more than the minimum data they need. These provisions are couched in fairly general language: with regard to behavioral advertising, however, the bill is more specific, requiring the FTC to set up an opt-out mechanism for consumers. It is much less stringent than the Rockefeller Bill, setting lower penalties (maximum of $3 million), allowing for industry self-regulation, and declaring that any FTC action against a company would pre-empt a lawsuit brought by a state.
- The “Do Not Track Kids Act of 2011” (H.R. 1895) -- A House bill introduced by Reps. Markey and Barton as an amendment to the Children’s Online Privacy Protection Act (COPPA) of 1998. It directs the FTC to make rules requiring companies to announce the kind of personal information they collect about children, requires them to obtain parental consent to collect it, and to provide an “opt-out” mechanism if they refuse. It also prohibits the collection of geo-location data for anyone under 18. A key proviso is the creation of an “Erasure Button” that would enable parents to delete all prior information collected on their child, as well as preventing any further collection. Penalties for violation would be up to the FTC. There is no provision for self-regulation, and states could bring suit for a violation or the threat of it.
- The Consumer Privacy Protection Act of 2011 (H.R. 1528) – A House Bill introduced by Reps. Stearns, Matheson, Bilbray and Manzullo. It is lengthy and complicated and, in the end, relatively toothless on the issue of privacy. It does not mention tracking, nor does it direct the FTC or any other entity to make rules. Instead, it issues some general guidelines, including requiring companies to “have a privacy policy in place”. Any FTC action would pre-empt state or private action; there is substantial encouragement for self-regulation (“safe harbor”), and penalties are small – a maximum of $500k.
In addition to summarizing these bills, the updated White Paper also summarizes the issues raised in recent Senate and House hearings. These included:
- The need to evaluate the economic impact of privacy regulation vs. the benefits to the online economy of stimulating consumer trust
- Defining the degree to which there is harm caused by consumer behavioral tracking
- Whether legislation or self-regulation is the appropriate response
- Jurisdictional authority – whether the FTC or the FCC is the most appropriate body to tackle privacy issues
These and other privacy-related issues will be at the forefront of Congressional and regulators’ concerns in the year ahead. The ICSC hopes its White Paper will be a useful summary of the issues relating to behavioral tracking for marketers, publishers and other interested parties.
About the ICSC
The Internet Content Syndication Council (ICSC) seeks to promote the growth of the Internet content syndication industry. Its mission is to increase understanding of the industry’s ability to generate revenue for digital publishers, provide marketers a way to reach targeted audiences at scale, and create high-quality content for consumers. ICSC members include representatives from leading advertising, technology and media organizations.
For further information about the ICSC, contact Laura Murray, Executive Director, at laura.murray@internetsyndication.org or at 212-452-2440. |
