What Will the FTC’s Privacy Framework Do?By: Abby Johnson - April 4, 2012
When the Federal Trade Commission released its final report on privacy last week, it made several recommendations for the future of privacy. Thus far, it has received both praise and criticism for the framework it laid out.
Is the FTC’s privacy plan good or bad? What do you think?
Although the jury is still out for what will actually happen with the recommendations, WebProNews spoke with Jules Polonetsky, the Director and Co-Chair of the Future of Privacy Forum, to learn more about what the FTC hopes to do. According to him, the FTC calls for companies to develop best practices to ensure consumer privacy. The Commission specifically focused on 5 main areas including “do not track,” mobile, data brokers, large platform providers, and promoting enforceable self-regulatory codes.
Do Not Track
When advocacy groups came up with idea of “do not track,” it received a bad reaction. The problem, which Polonetsky pointed out, was that no one really knew what it meant. Different definitions floated around that associated it with everything from an end to behavioral advertising to a super invisible button.
The FTC also gave the impression that it meant putting a stop to data collection of any kind. Many businesses were outraged since they feared it would prevent them from seeing analytics, ad reporting, and other critical areas that they depend on. However, as the idea evolved, the industry developed a symbol to show whether or not an ad is tracking data. This symbol also gives users the option to opt-out.
Although it is unclear if the FTC sees the symbol as an adequate measure for “do not track,” Polonetsky told us that the Commission did not call for legislation of it.
“It does appear that they do want something more, but they’ve clearly said, ‘We’re not calling for Do Not Track legislation. We’re happy with the industry effort, and we’d like to see something more agreed to in the W3C process,'” he said.
According to Polonetsky, mobile is a major area of focus for the FTC. In the report, the Commission issued a clear warning that it was watching apps that target children. It also said it was aware that ads are not being labeled on mobile devices and asked for self-regulation in this area.
“It was a real call to action to press the app developers [and] the mobile companies,” said Polonetsky.
While the FTC urged Congress to pass general privacy legislation, it was very specific about regulating data brokers. If you remember, WebProNews previously reported that the White House also recently released a privacy report that asked Congress to implement a privacy “Bill of Rights.” The White House primarily focused on multi-stakeholder efforts that encourage businesses to self-regulate and create codes of conduct.
Although the FTC is advocating this as well, it is also pushing toward legislation for data brokers. It wants a centralized website where data brokers identify themselves and their methods for collecting data. Through this site, the Commission wants users to have the power to visit it and correct any inaccurate data or opt-out.
Large Platform Providers
In the FTC’s preliminary report, it singled out ISPs for data collection. At that time, ad networks were attempting to partner with ISPs to utilize the data the providers gain from their inspections. While the FTC is still concerned about this issue, it is also looking at browsers, operating systems, and social networks since they too have this critical data. Polonetsky told us that this was a “wise” move on the FTC’s part.
The Commission plans to hold a workshop later this year to determine which companies need greater permission to access data.
Enforcing Self-Regulatory Codes
The FTC’s report also called for self-regulatory standards, which Polonetsky said helps to bridge the Commission’s framework to that of the White House’s. Both reports want businesses and privacy advocates to work together to develop codes of conduct. If this happens, the FTC said it would enforce the codes.
“Although they’re for legislation, they’re much more for companies actually doing stuff to show some progress that everybody can point to,” said Polonetsky.
Although some retailers and marketers have spoken out against the FTC’s privacy proposal, others have endorsed it. In fact, Yahoo has already said it will be launching a “do not track” mechanism by early summer.
Polonetsky told us that we’re currently at a “big turning point” and that it would take time to see if businesses really take self-regulatory measures.
“If companies want to avoid legislation, show that you’re doing it,” he said. “If you want legislation, but you want it to be right, then set the path by coming up with the rules yourself.”
“We’re either gonna go forward, or it’ll continue to go around in circles,” he added.
Interestingly, Polonetsky said that there would be no privacy legislation this year due to the election year.
He did, however, point out that innovation and privacy often clash. For example, it would be difficult for businesses to collect data but then be forced to ask users for their permission before they used it to create something new and different. Most people would say they want to give their permission before their data is used, but how many people would grant it?
As Polonetsky explained, people don’t know what something is and if they like it, until they see it. Take, for instance, Facebook’s News Feed. Everyone hated it when it was first introduced, but now most people depend on it. For this reason, Polonetsky told us that it would take a lot of work to understand and balance innovation and privacy.
Would you rather have privacy or innovation? Let us know.