The agency recommends that companies that track consumers' online activities provide an opt-out option.Although the Federal Trade Commission did not discuss privacy issues in its approval of the $3.1 billion Google-DoubleClick merger, the agency still has plenty to say to the advertising community about data collection and consumer privacy.
In hopes of setting the pace for a self-regulatory privacy regime for companies that track consumer online activities, the FTC Dec. 20 released a set of proposed principles for companies like Google, Yahoo and MSN that track consumers' online activities.
Known as behavioral advertising, the practice includes tracking and storing searches the consumer has conducted, Web pages visited and content viewed. The collected information is used to deliver advertising targeted to the individual consumer's interests.
Click here to read more about the FTC's approval of the Google-DoubleClick merger.
The new FTC proposal states that there is nothing inherently wrong with behavioral advertising since it provides benefits such as free content and personalized advertising, but that the practice is largely invisible to consumers and raises possible privacy concerns.
The FTC said sites that collect data should provide a "clear, consumer-friendly and prominent" statement that data is being collected, and give consumers the ability to choose whether to have their information collected for such purposes.
For sites that collect sensitive personal data, the FTC recommended that they only collect sensitive data for behavioral advertising if they obtain affirmative expressed consent from the consumer to receive such advertising. In addition, the agency said, companies should obtain such consent from consumers before using data in a manner materially different from any promises the company made when it collected the data.
"The purpose of this proposal is to encourage more meaningful and enforceable self-regulation to address the privacy concerns raised with respect to behavioral advertising," the FTC principles stated. "FTC staff was mindful of the need to maintain vigorous competition in online advertising as well as the importance of accommodating the wide variety of business models that exist in this area."
The FTC is seeking additional comment and information about whether tracking data is being used for purposes other than behavioral advertising and whether such secondary uses, if they occur, merit some form of heightened protection.
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