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FTC’s Do Not Track Part 3: Consumer Choice

I am speaking at SMX WestToday, we continue our analysis of the FTC’s “Protecting Consumer Privacy in an Era of Rapid Change: A Proposed Framework for Business and Policymakers” in preparation for my presentation next week at the SMX West Conference.  The FTC is promoting three aspects: (1) privacy by design; (2) clear and meaningful choice; and (3) transparency.  Today, we focus on consumer choice.

How many privacy policies have you read?  I have, but I draft them, what’s your excuse?

The FTC says the privacy policies, something they originally promoted, have become confusing, conflated and used to mislead rather than to help.  The FTC would rather have real choice.

The FTC admits the law does not require choice to consumers in many instances.  The FTC further admits there are certain accepted practices like order fulfillment, internal operations, fraud prevention and first party marketing that do not require choice.  The FTC also grouped contextual advertising (targeted ads based on the current visit to the site or a single search query) in this category.  On the other hand, the FTC wants to let the consumer decide whether their data can be shared with third parties.

If it is not an accepted practice, the FTC thinks companies should offer the choice at a time and in a context in which the consumer is making a decision about his or her data.  If the default setting is to share data, it should be disclosed conspicuously when the consumer signs up for the service rather than hiding it in the privacy policy.

One of the debates the FTC considered was whether to mandate an “opt in” consent.  In response, the FTC wrote: “Indeed, a clear, simple, and prominent opt-out mechanism may be more privacy protective than a confusing, opaque opt-in.  Staff has already stated that, regardless of how they are described, choices buried within long privacy policies and pre-checked boxes are not effective means of obtaining meaningful, informed consent.  Further, the time and effort required for consumers to understand and exercise their options may be more relevant to the issue of informed consent than whether the choice is technically opt-in or opt out.”

DO NOT TRACK

That brings us to Do Not Track.  These five pages of the 80+ total stirred up the most discussions.  While many browsers allow users to install cookies or other things to prevent tracking the FTC says industry has not gone far enough self-regulating because these options are often hidden.  “Given these limitations, Commission staff supports a more uniform and comprehensive consumer choice mechanism for online behavioral advertising, sometimes referred to as “Do Not Track.” The FTC says it could be accomplished through legislation or through “robust” self-regulation.

The FTC admits it may be easier than it first appears.  While the browser may be the easiest way to inform sites about a consumer’s choice, the sites out there would have to respect that choice or face penalties.  At the same time, the FTC is concerned about infringing on the benefits of targeted ads.  The FTC does not want a registry that would have millions of unique identifiers.   More sophisticated users may want more granular options to allow certain tracking but not others.

The libertarian spirit in me says consumers already have a clear choice.  Facebook and their apps are not “free.”  We were apparently perfectly happy pre-Facebook and you can choose not to use it.  I know it goes beyond Facebook.  If we go too far though, what is going to happen to all the free services we enjoy?