Source: https://www.scribd.com/doc/175778037/Online-Profiling
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Matched Legal Cases: ['ART 2', 'art 1', 'art 2', 'art 1', 'art 1', 'art 2', 'art 1', 'art 2', 'art 2', 'art 1', 'art 2', 'art 2', '§ 6501', 'art 2', 'art 2', 'art 2', '§ 553', 'art 2', 'art 2', 'art 2', 'art 2', 'art 2', 'art 2', 'art 2', 'art 2', 'art 2', 'art 2', 'art 2', 'art 2', 'art 2', 'art 2', 'Art. 29']

ScribdBrowseInterestsCareer & MoneyPersonal GrowthPolitics & Current AffairsScience & TechHealth & FitnessLifestyleEntertainmentBiographies & HistoryFictionBrowse byBooksAudiobooksNews & MagazinesSheet MusicBrowse allUploadSign inJoinOnline ProfilingUploaded by CHow Gatchallan0.0 (0)DownloadEmbedDescription: Online ProfilingView MoreOnline ProfilingCopyright: Attribution Non-Commercial (BY-NC)List price: $0.00Download as PDF, TXT or read online from ScribdFlag for inappropriate contentONLINE PROFILING: A REPORT TO CONGRESS PART 2 RECOMMENDATIONSFEDERAL TRADE COMMISSION JULY 2000
Robert Pitofsky Sheila F. Anthony Mozelle W. Thompson Orson Swindle Thomas B. Leary Chairman Commissioner Commissioner Commissioner Commissioner
* The Commission vote to issue this Report was 4-1, with Commissioner Swindle dissenting, and Commissioner Leary concurring in part and dissenting in part. Separate statements by Commissioners Thompson, Swindle and Leary are attached to this Report.
IV. . . . . . . . . . . . . Security . .TABLE OF CONTENTS
I. . . . . . . . . . . . . . . . . . . . Choice . Access . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 5. . . . . . . . . . . . . . . . . . . . . . . 3 The NAI Principles . . . . . . 4 1. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 A. . . . . . 7 4. . . . . . . . . D. . . . . 8 6. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Notice . . . . . . . . . . . . . 3 Fair Information Practices and Profiling . Background . . . . . . . . . . . . . 1 Profiling . . . . . . . . . . . . . . . . . 6 3. . . . . . . . . . . . . Recommendations . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 2. . . . . . . . . . . Enforcement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
APPENDIX A: NAI Principles
. . . . . . . . . . . . . . . . . . . . . . . . . . . . Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . 1 Fair Information Practices and the Network Advertising Initiative Principles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 III. . . . . . . . . . . . . . . . . II. . . . . . . . . . . . . . . . . . . . . . . Additional Consumer Protections . . . . . . B. . . . . . . . . . . . . . . . . . . . . . . . 9 Conclusion . . . .
to supplement its report with specific recommendations to Congress after it had an opportunity to fully consider the industry’ s self-regulatory proposals and how they interrelate with the Commission’ s previous views and recommendations on online privacy generally.gov/os/2000/06/onlineprofilingreportjune2000. however.htm>. This report presents the Commission’ s recommendations.
FAIR INFORMATION PRACTICES AND THE NETWORK ADVERTISING INITIATIVE PRINCIPLES
A.ftc. 2000. The Commission did not make recommendations at that time. the major reports setting forth the core fair information practice principles are: The U. In addition to the HEW Report. 1998 Report at 7-14. indeed. Organization for Economic Cooperation and 1
. (“Profiling Report (Part 1)"). because a dialogue with the network advertising industry regarding self-regulatory principles was still ongoing.pdf>.1 The report described the nature of online profiling. and the Commission’ s efforts to address these concerns. and model codes since 1973.gov/reports/privacy3/index. INTRODUCTION On June 13. The Commission promised. Personal Privacy in an Information Society (1977).ftc. available at <http://www.Online Profiling (Part 2): Recommendations I. Canada.
1998 Report at 7-11. Background As noted in Part 1 of this report.
Profiling Report (Part 1) at 19-20. there are a set of core fair information practice principles that have guided the Commission with respect to online privacy issues.3 these fair information practice principles predate the online medium. and Europe have recognized them in government reports.
II. Privacy Protection Study Commission. guidelines. Privacy Online: A Report to Congress (“1998 Report”).2 First summarized in the Commission’ s 1998 report.S.4 The core principles are: Available at <http://www. consumer privacy concerns about these practices. agencies in the United States. the Federal Trade Commission (hereinafter “FTC” or “Commission”) issued Online Profiling: A Report to Congress.
5 (2) Choice – consumers must be given options with respect to whether and how personal information collected from them may be used for purposes beyond those for which the information was provided. Privacy and the NII: Safeguarding Telecommunications-Related Personal Information (1995). see also 1999 Report at 3-4. OECD Guidelines on the Protection of Privacy and Transborder Flows of Personal Data (1980). 2
. 1998 Report at 10.S. Self-Regulation and Online Privacy: A Report to Congress (1999) [hereinafter “1999 Report”] at 3-4.9
Development.8 The Commission also identified Enforcement – the use of a reliable mechanism to identify and impose sanctions for noncompliance with these fair information practices – as a critical ingredient in any governmental or self-regulatory program to ensure privacy online.Online Profiling (Part 2): Recommendations (1) Notice – data collectors must disclose their information practices before collecting personal information from consumers. 2000 Report at 4.7 and (4) Security – data collectors must take reasonable steps to assure that information collected from consumers is accurate and secure from unauthorized use. see also 1999 Report at 3-4. Information Policy Committee. of Commerce. 2000 Report at 4.6 (3) Access – consumers should be able to view and contest the accuracy and completeness of data collected about them. and the Canadian Standards Association. see also 1999 Report at 3-4. Information Infrastructure Task Force. U. 2000 Report at 4. see also 1999 Report at 3-4. 1998 Report at 10-11. Model Code for the Protection of Personal Information: A National Standard of Canada (1996). U.S. 2000 Report at 4. The European Union Directive on the Protection of Personal Data (1995). Privacy and the National Information Infrastructure: Principles for Providing and Using Personal Information (1995).
1998 Report at 8-9. Privacy Online: Fair Information Practices in the Electronic Marketplace (May 2000) (“2000 Report”) at 4. Dept. 1998 Report at 7-8. see also Federal Trade Commission. 1998 Report at 9. Privacy Working Group.
these network advertising companies do not merely supply banner ads. Profiling As Part 1 of this report also explained. Some of these challenges stem from the invisible. Although the information gathered by network advertisers is often anonymous (i. Other challenges result from the presence of multiple network advertisers on particular Web sites. Nonetheless. consumers may be totally unaware that their activities online are being monitored. needs. many of the banner ads displayed on Web pages are not selected and delivered by the Web site visited by a consumer. The result is a detailed profile that attempts to predict the individual consumer’ s tastes.
C. All that consumers see are the Web sites they visit. and purchasing habits and enables the advertising companies’computers to make split-second decisions about how to deliver ads directly targeted to the consumer’ s specific interests.. or information collected directly from consumers through surveys and registration forms. This consumer data can also be combined with data on the consumer’ s offline purchases. the profiles derived from tracking consumers’activities on the Web are linked or merged with personally identifiable information.e. in some cases. In general. network advertising
companies are most often invisible to consumers. but by network advertising companies that manage and provide advertising for numerous unrelated Web sites. Despite these 3
.Online Profiling (Part 2): Recommendations B. the profiles are linked to the identification number of the advertising network’ s cookie on the consumer’ s computer rather than the name of a specific person). The purpose of collecting and analyzing this data is to allow the advertising networks to make a variety of inferences about each consumer’ s interests and preferences. Unless the Web sites visited by consumers provide notice of the ad network’ s presence and data collection. Fair Information Practices and Profiling Implementing fair information practices in the context of profiling by network advertisers presents numerous challenges. third-party relationship of network advertisers to consumers. they also gather data about the consumers who view their ads. Yet more challenges arise from the variations between the practices and business models of the individual network advertising companies and the many different categories of information that can be used for profiling purposes.
D. an organization comprised of the leading Internet Network Advertisers – 24/7 Media. transparency is an issue concerning both the collection and use of non-personally identifiable information (“non-PII”) and personally identifiable information (“PII”). Avenue A. the Commission believes that it is essential to implement the fair information practice principles in this context. Following the workshop. Engage. a set of principles has emerged that the Commission finds reasonably implement the fair information practice principles. After lengthy discussions.html>. As noted at the Public Workshop. and MatchLogic – to develop a framework for self-regulation of the online profiling industry. The NAI Principles 1. A copy of the principles is attached as an appendix to this report. Burst! Media.ftc. Notice The threshold issue in applying fair information practices to online profiling is how to achieve transparency when consumers are largely unaware they are being profiled. 4
.gov/ bcp/profiling/comments/index.htm> and public comments received in connection with the Workshop can be viewed on the Federal Trade Commission’ s Web site at <http://www.gov/bcp/profiling/index.” NAI Principles at 2.10 industry members announced the formation of the Network Advertising Initiative (NAI). the NAI companies submitted working drafts of selfregulatory principles for consideration by FTC and Department of Commerce staff.11 Consumers cannot make informed decisions about whether to permit the collection of their information unless they know it is being collected and they understand how the information will be used. the FTC and the United States Department of Commerce jointly sponsored a Public Workshop on Online Profiling. The NAI members use the term “online preference marketing”or “OPM” rather than “profiling” because the process involves “collecting data over time and across Web pages to determine or predict consumer characteristics or preferences for use in ad delivery on the Web. DoubleClick.Online Profiling (Part 2): Recommendations challenges. AdForce. 1999. At the Online Profiling Workshop in November 1999. A transcript of the Workshop is available at <http://www.12 The greatest
On November 8. AdKnowledge.ftc.
See Profiling Report (Part 1) at 12-13.
NAI has no ability to require a host Web site to post a notice about data collection by network advertisers. it is technically possible. It is extremely difficult to link dynamic IP addresses to an individual. If IP addresses become individual identifiers. IP addresses are generally considered non-personally identifiable information. A sample Robust Notice is attached as a “mock up” to Appendix D of the NAI Principles." i. an IP address may be considered "data used to identify.Online Profiling (Part 2): Recommendations transparency is achieved by providing disclosure of notice and choice options to consumers on the Web site they are visiting (the so-called “host” or “publisher” Web site) on which the network advertiser is placing cookies or otherwise collecting information. An Internet Protocol (“IP”) address. “robust” notice will be required at the time and place such information is collected and before the personal data is entered. personally identifiable information. including the increased use of DSL and cable modems.15
See NAI Principles at 8-10. a heightened level of notice.13 Where non-personally identifiable information is collected for profiling.” changing each time a consumer connects to the Internet. Personally identifiable information will always be collected pursuant to a contract between an individual NAI company and a host Web site under the Principles. Where personally identifiable information is collected for profiling. Consumers who may not even be aware of network advertisers are unlikely to visit the network advertiser’ s site to obtain notice and choice. In the absence of a direct contractual relationship. or locate an individual. See NAI Principles at 7. Many IP addresses are "dynamic. As technology evolves." or unique to that consumer's computer. However. NAI companies do not always have a direct contractual relationship with the host sites on which they collect nonpersonally identifiable information. although it has agreed to make reasonable efforts to ensure that publishers post such notices.14 Under the NAI Principles. Under the NAI Principles. At present. clear and
conspicuous notice will be in the host Web site’ s privacy policy.. See NAI Principles at 5. the address that allows a network advertiser to deliver an ad. consumers will receive notice of network advertisers’ profiling activities on host Web sites and their ability to choose not to participate in profiling. NAI companies will contractually require that host Web sites provide these disclosures and will make reasonable efforts to enforce those contractual requirements. as opposed to "static. See 5
. Static IP addresses are more likely to become personally identifiable because they are linked in an individual's computer. however. is treated as non-PII under the NAI Principles. contact.e. although using Internet service provider log files. there may be a trend toward use of static IP addresses.
See. Opt-out models require affirmative steps to prevent the collection and/or use of information. the original collection of information.Online Profiling (Part 2): Recommendations 2.18
NAI Principles at 5.g. it will continue to evaluate their effectiveness. As the Commission's experience with these mechanisms evolves. 15 U. The guiding principle for these consent mechanisms is to ensure that consumers are able to make informed choices about their privacy preferences and can exercise those choices in a reasonable manner. Opt-in procedures may be more appropriate where the information at issue is particularly sensitive – for example. consumers should be able to decide whether to participate in profiling.S. combining elements of both opt-in and opt-out.
See NAI Principles at 7-8. 6
. the choice method depends on the type of information being collected and the consumer’ s knowledge about. See NAI Principles at 8. and level of control over. Under the NAI Principles. As noted below.” Opt-in regimes require affirmative steps by the consumer to allow the collection and/or use of information. cannot be applied to information collected prior to the changes in the absence of affirmative (opt-in) consent of the consumer. network advertisers will not merge non-personally identifiable information with personally identifiable information if the nonpersonally identifiable information was collected pursuant to a privacy policy that stated that such information would never be merged with personally identifiable information.C. the collection and use of children’ s personal information or sensitive medical information.16 They provide that:
Material changes in the information practices of a network advertising company. e. §§ 6501-06 (COPPA). Choice Once informed about the network advertiser’ s information collection practices.
See NAI Principles at 6. under the NAI Principles.17 Previously collected non-personally identifiable data (“clickstream”) cannot be linked to personally identifiable information without the affirmative (opt-in) consent of the consumer.. hybrids may also have a role. There are traditionally two models for choice – “opt-in” and “opt-out. The Commission believes that both regimes have a role to play in online privacy. However.
22 As the Commission’ s 2000 Report stated. access.20 On sites where multiple network advertising companies collect information (generally non-personally identifiable information). By contrast. opt-out choice has been provided.
See NAI Principles at 4-6. the prospective merger of PII and non-PII). including the merger of personally identifiable online and offline data. 7
. is also addressed by the NAI Principles.g. which promise that consumers will be given reasonable access to personally identifiable information and other information that is associated with personally identifiable information retained by a network advertiser for profiling. Where past expectations about the nature and use of information would be changed (e. See NAI Principles at 8.Online Profiling (Part 2): Recommendations
“Robust” notice and opt-out choice (appearing at the time and place of information collection and before data is entered) is required for prospective use of personally identifiable information for profiling. “[w]hile Access is widely recognized as an important fair information practice. See NAI Principles at 5. where only future expectation are implicated (e. in cases of a material changes in privacy policy or a merger of previously non-identifiable clickstream with personally identifiable information).. opt-in choice has been required. the Commission believes that Access presents
See NAI Principles at 8-10.21
3.g. consumers will be able to opt-out of profiling by any or all of the network advertisers on a single page accessible from the host Web site’ s privacy policy.19 Clear and conspicuous notice and opt-out choice (appearing in the publishers’privacy policy with a link to the network advertiser or an NAI opt-out Web page) is required for prospective use of non-personally identifiable information for profiling. Access The third prong of fair information practices.
.24 In the context of security. see generally Final Report of the Federal Trade Commission Advisory Committee on Online Access and Security (May 15. network advertisers have committed to working with an independent third party enforcement program (e. or improper access. legislative standards are developed they should apply to network advertisers and other Internet businesses equally. Security Consistent with the principle of Security. destruction. if.25
5. such as BBBOnline or TRUSTe.
See NAI Principles at 3. which may include public reporting of violations or referral to the FTC. Therefore. Under the NAI Principles. network advertisers will make reasonable efforts to protect the data they collect for profiling purposes from loss.Online Profiling (Part 2): Recommendations unique implementation issues that require consideration before its parameters can be defined. alteration. under the NAI proposal. a seal program) to ensure compliance with the
2000 Report at 17. network advertisers should be subject to the same standards as all businesses that operate on the Internet. 2000) (“ACOAS Report”). Enforcement The bedrock of any effective self-regulatory or legislative scheme is enforcement. this means that nearly all industry members subject themselves to monitoring for compliance by an independent third party and to sanctions for non-compliance.”23
4. misuse. in the future. In a selfregulatory context. Enforcement may be provided by a seal organization.g. 8
. ACOAS Report at 19-26.
The mission of the Advisory Committee was to provide TRUSTe with options for “how its licensees can effectively implement fair information practices of notice and choice while addressing the consumer’ s need for full and understandable disclosure. 9
. Their principles address the privacy concerns consumers have about online profiling and are consistent with fair information practices. sexual behavior or sexual orientation.org/about/about_tpas. See NAI Principles at 3. and the NAI principles present a solid self-regulatory scheme.Online Profiling (Part 2): Recommendations Principles.” The term of the Advisory Committee ended June 1.html>). NAI companies will not use personally identifiable information about sensitive medical or financial data.28 In addition. TRUSTe Forms Advisory Committee on Third Party Ad Servers and Licensee Practices (available at <http://www.
RECOMMENDATIONS The Commission commends the NAI companies for the innovative aspects of their proposal
and for their willingness to adopt and follow these self-regulatory principles.29
III. the NAI companies will submit to independent compliance audits the results of which will be made publicly available. and its final product was proposed options for inclusion in the next version of TRUSTe’ s license agreement. See NAI Principles at 3. TRUSTe announced the formation of an Advisory Committee on Third Party Ad Servers and Licensee Practices. As the Commission has previously recognized. self-regulation is an important and powerful mechanism for protecting consumers. or social security numbers for profiling. and the nature of contractual relationships between third party ad servers and TRUSTe licensees.
See NAI Principles at 12. 2000. NAI companies have committed to ensure that they obtain data for profiling from reliable sources. the NAI Principles provide additional protections for consumers beyond those required by the traditional fair information practices. 2000. Additional Consumer Protections Finally.26 If no such program is available within six months.27
6.truste. For example. technological capabilities and constraints.
In the context of profiling. not merely at DMA member sites. 10
. Such legislation would set out the basic standards of practice governing the collection and use of information online for profiling. NAI members have agreed to begin to put their principles into effect immediately while Congress considers the Commission’ s recommendations concerning online profiling. even in the absence of a contractual requirement.31 including authority to enforce those standards. new entrants to the market. and provide an implementing agency with the authority to promulgate more detailed standards pursuant to the Administrative Procedure Act.C. § 553. which would require close attention. For while NAI’ s current membership constitutes over 90% of the network advertising industry in terms of revenue and ads served. only legislation can compel the remaining 10% of the industry to comply with fair information practice principles. The Commission commends DMA and its members for their commitment. Rulemaking authority also would enable the implementing agency to take into account relevant technological advances that address online profiling issues. host Web sites that are members of DMA will commit to posting the notices required by the NAI Principles. the Commission recommends legislation that would set forth a basic level of privacy protection for all visitors to consumer-oriented commercial Web sites with respect to profiling. In addition. 5 U. namely Web sites that do not directly contract with the network advertisers.30 Accordingly. determining the contours of the fair information practice of “choice. and drop-outs from the self-regulatory program.Online Profiling (Part 2): Recommendations Moreover.S.” in particular. but nonetheless believes that legislation is necessary to ensure that such notice is provided at all Web sites. only legislation can guarantee that notice and choice are always provided in the place and at the time consumers need them. Nonetheless. The proposed legislation would also provide the implementing agency with the authority to grant safe harbors to self-regulatory principles which effectively implement the standards of fair
The Direct Marketing Association (DMA) has indicated that. backstop legislation addressing online profiling is still required to fully ensure that consumers’privacy is protected online. there are unavoidable gaps in the network advertising companies’ ability to require host Web sites to post notices about profiling. presents special challenges in framing a legislative mandate and in promulgating the required standards. Selfregulation cannot address recalcitrant and bad actors.
as well as with technological developments. but other industry groups or individual firms would be free to apply for safe harbor approval as well. the definitions of fair information practices set forth in the statute should be broad enough to provide flexibility to the implementing agency in promulgating its rules or regulations. the final decision as to whether any self-regulatory guidelines qualify for safe harbor status will be made by the implementing agency.33 The Commission recognizes that the implementation of these practices may vary with the nature of the information collected and the uses to which it is put. 11
. This legislative proposal supplements the legislation previously recommended by a majority of the Commission on online privacy generally. The Commission presently believes that there is a good case the NAI Principles would qualify for such a safe harbor. it expands upon the “notice” element to require host Web sites to provide clear and conspicuous notice about the use of cookies or other technology by the network advertising companies to collect non-personally identifiable information. Among other things. and consider any relevant experience with comparable self-regulatory schemes.32 Under the proposed legislation.Online Profiling (Part 2): Recommendations information practices articulated in the legislation and subsequent rulemaking. all network advertising companies and all consumer-oriented commercial Web sites that permit the collection of information from or about consumers by network advertising companies would be required to comply with the four widely-accepted fair information practices. the Commission recommends that any legislation be phrased in general terms and be technologically neutral. following any rulemaking.
CONCLUSION The Commission is committed to the goal of ensuring privacy online for consumers and will
continue working to address the unique issues presented by online profiling. Thus. For this reason. and after it has the opportunity to consider the guidelines and their effectiveness at the time the application for safe harbor treatment is made.
Under the legislative framework recommended by the Commission.
. Thompson Online Profiling: A Report to Congress (Part 2) Recommendations
The Internet is generally recognized as an empowering technology that makes vast quantities of information readily available to consumers and businesses alike.
Members of the profiling industry need to do more than derive self-benefit from gathering information from consumers that they follow around the World Wide Web. has led to the creation of a vigorous new electronic marketplace based upon direct personal connections between merchants and consumers. They must incorporate their self-regulatory program into a plan to demonstrate how consumers will benefit from information gathering and profiling. More specifically.. the program will require the Network Advertising Initiative (“NAI”) companies to tell consumers what they are doing with consumers’personal information and give consumers a choice about whether to participate. raise important concerns about personal privacy and the information that is collected from consumers by online businesses.a new industry that uses technology to gather information from Internet consumers. In connection with our work in the area of electronic commerce and the protection of consumers’personal data. efficiencies and other advantages for both business and consumers.Online Profiling (Part 2): Recommendations Statement of Commissioner Mozelle W. The Internet’ s growth. But this program alone will not provide all that consumers need and want in this area. as well as the concurrent emergence of related technologies. however. the FTC has reviewed the actions of these online profilers.
The self regulatory program presented here provides the profiling industry with an opportunity to come out from the shadows and include consumers in its value proposition. Nowhere is this more clear than in the case of online “profilers”. Benefits from this new marketplace include increased choices.
Information accessibility does. This undertaking is important both to consumers and to the future of the industry.
our report is also making legislative recommendations that I support because they are fully consistent with our view that well-drafted legislation in this area will bolster consumer confidence by allowing us to address areas that industry is unwilling or unable to address itself.
. the Commission’ s work with the NAI and consumers shows that although the principles behind the NAI’ s self-regulatory program are sound. Accordingly. legislation is needed to address certain gaps in the program’ s reach.Online Profiling (Part 2): Recommendations In addition.
and recommend some “backstop legislation. However. “Privacy Online: Fair Information Practices in the Electronic Marketplace: A Report to Congress” (Statement of Commissioner Thomas B. if people are adequately informed about profiling. and this need is particularly compelling in the area of online profiling.Online Profiling (Part 2): Recommendations STATEMENT OF COMMISSIONER THOMAS B. My previous Statement emphasized that the practice was “uniquely invasive” and that it is necessary to “ensure that consumers are adequately informed about these Internet capabilities.” Id. advocate safe-harbor protections for these principles and others of a similar kind. as well as other practices that raise privacy concerns. An appropriate marketplace response obviously depends on communication of consumer choices. the marketplace should provide the appropriate mix of substantive privacy protections. LEARY CONCURRING IN PART AND DISSENTING IN PART Online Profiling: A Report to Congress (Part 2): Recommendations
I agree with the Report’ s recommendations relating to Online Profiling insofar as they endorse the NAI self-regulatory principles.” However. Concurring in Part and Dissenting in Part) (May 2000).1 I believe that legislation should focus on adequate “Notice” and not mandate across-the-board standards for other elements of the so-called “fair information practices. Leary.” There is a need for clear and concise disclosure of individual privacy policies in both the online and offline worlds. which might initially suggest that some legislative attention to the element of “Choice” is
. at 8. for the reasons expressed in my separate statement relating to online privacy generally.2 The technological capabilities for profiling are unfamiliar to many people and the practice may be perceived as particularly intrusive.
. Because there does not seem to be adequate discussion of this issue in the Report’ s recommendations or in any of the numerous privacy bills thus far introduced. If mandated “Choice” simply refers to some mechanism whereby a consumer can either grant or refuse permission for online profiling.” It is not appropriate to defer all the tough issues for future rule-making. A consumer should have the ability to exit the site before the fact of the visit becomes part of a profile. I have been reluctant to endorse this legislative option because. “Choice” means that a consumer can exercise this choice (either by opting out or failing to opt in) and still obtain the same benefits as a consumer less solicitous of privacy. Notwithstanding these reservations. The question of appropriate rewards or penalties attendant upon the exercise of various options can be extremely complicated.Online Profiling (Part 2): Recommendations also appropriate.” at this time. Consumers who object should not have a legally guaranteed right to “free-ride” on possible value and corresponding benefits made possible by the cooperation of those who do not object. Put another way. this Report contains more points with which I concur than points from which I dissent.I am reluctant to endorse a legislative mandate for “Choice. depending on the individual business . it should not be illegal to reward consumers who are willing to be profiled.. it could be unfair. . This Report focuses on a particularly serious issue that 2
.and because the “free-riding” issue may or may not be significant. If. more general Commission Report on Privacy Online. However. there has not been sufficient attention to what “Choice” means. I would have no problem with it. Similar concerns about unaddressed complexities apply to proposals for mandated “Access” and “Security. I have voted for this Report. Unlike the earlier. however. up to now.
the particular legislative proposals that I consider overbroad have a relatively limited impact. In these circumstances.Online Profiling (Part 2): Recommendations applies uniquely to the online world and it gives appropriate recognition to a comprehensive selfregulatory scheme.
. I am optimistic that further dialogue will continue to narrow our remaining points of disagreement.
Online Profiling: A Report to Congress (Part 2). File No.
I wholeheartedly endorse the language in the Commission’ s report commending NAI for the innovative aspects of its proposal and for its willingness to adopt and follow these selfregulatory principles. despite NAI’ s laudable self-regulatory efforts. The agreement provides transparency to consumers by furnishing notice of network advertisers’profiling on host Web sites and enabling consumers to choose not to participate in profiling.1 self-regulation is an important and powerful mechanism for protecting consumers. and the NAI principles present a solid self-regulatory scheme. Recommendations at 9 (July 2000). Rather.Online Profiling (Part 2): Recommendations DISSENTING STATEMENT OF COMMISSIONER SWINDLE in Online Profiling Project. I recognize that there may well have been instances of unacceptable practices related to profiling. it is directed to the majority’ s recommendation that. legislation is
Federal Trade Commission. Self-Regulatory Principles For Online Preference Marketing By Network Advertisers.
. As the Commission has generally recognized. The NAI has recognized this concern and has put forward a commendable scheme of self-regulation. which has unique attributes. P994809
I applaud the member companies of the National Advertising Initiative (NAI) for their agreement on self-regulatory principles concerning online profiling.
My dissent here is not directed to the NAI principles.
See generally id.3 Again. I fear that the legislative recommendation will create an incentive for industry to discontinue seeking self-regulatory solutions. which I strenuously opposed. 2
. My colleagues.Online Profiling (Part 2): Recommendations needed as a “backstop.
I oppose imposing burdensome regulation on an entire industry to address the 10% of advertisers who are not members of NAI – that is. unwilling
to accept a self-regulatory approach. those engaged in profiling to which the NAI self-regulatory principles would not apply. find it necessary to support a highly regulatory scheme for an entire industry. I consider legislation that mandates the four fair information practice principles to be overly burdensome and unwarranted.4 Simply stated. The majority can neither define nor identify who these advertisers are. we do not have a market failure here that requires legislative solution. at 10.”2 Such legislation would have the same characteristics as the legislation recommended by a majority of the Commission in its 2000 Privacy Report. Report to Congress on Privacy Online: Fair Information Practices in the Electronic Marketplace (May 2000) (Dissenting Statement of Commissioner Orson Swindle). We should not recommend legislation and regulation if we cannot demonstrate that the problems they are intended to resolve are real and significant.
Federal Trade Commission. for the reasons discussed at length in my dissent from the 2000 Privacy Report. the devil is in the details.
we learn more about industry initiatives and technological changes that can alleviate concerns about online profiling.
Microsoft Announces New Cookie Management Features for Internet Explorer 5. Technology also has just been introduced into the marketplace that will empower consumers to address online profiling without the need for government action. including a notice requirement that we all agree is paramount.5 (July 20.5 With each passing week. NAI just announced its self-regulatory principles to address concerns that have been raised about online profiling.Online Profiling (Part 2): Recommendations The majority has been hasty in calling for legislation and regulation governing online profiling. 3
. Why not give these promising developments a chance before resorting to the heavy hand of government intervention?
I dissent. 2000) (company press release).
Online Profiling (Part 2): Recommendations
Appendix: NAI Principles
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