FTC Complaint Targets Google, Microsoft, Yahoo

    April 8, 2010

The Center for Digital Democracy, the federation of state Public Interest Research Groups (PIRGs), and the World Privacy Forum may have just created some problems for Google, Microsoft, Yahoo, and other companies that deal in online ads.  Together, they submitted a complaint about the companies to the Federal Trade Commission today.

The first part of a 32-page letter stated, "Recent developments in online profiling and behavioral targeting . . . have all contributed to what is now standard practice online.  A vast ecosystem of online advertising and data auctions and exchanges, demand- and supply-side platforms, and the increasing use of third-party data providers that bring offline information to Internet profiling and targeting, operates without the awareness or consent of users."

The complaint then continued, "This massive and stealth data collection apparatus threatens user privacy.  It also robs individual users of the ability to reap the financial benefits of their own data – while publishers, ad exchangers and information brokers (so-called ‘ad optimizers’) profitably cash in on this information."

So the three organizations behind the letter would like to see certain procedures only allowed on an opt-in basis.  There’s a mention of financial compensation for consumers, too, and a few other requests that relate to openness and transparency.

This may not get too far; the manner in which online ads work is indeed standard practice, and regulators don’t seem likely to flip the system on its head after all this time.  Still, all of the companies named in the complaint – and perhaps Google in particular – aren’t liable to enjoy the extra attention from the FTC.