Consumer Groups Hound FTC to Rein in Google, Mobile Web Ad Practices

By Clint Boulton  |  Posted 2009-01-13 Print this article Print

Two weeks into the New Year and it's time to dispense with the niceties and get back to corporate bashing on Capitol Hill.

The Center for Digital Democracy and the U.S. Public Interest Research Group (USPIRG) asked the Federal Trade Commission to scrutinize and halt mobile advertising practices that may be violating the privacy of children, adolescents and other consumers.

In an amendment of a 2006 complaint arguing that online ad practices infringe on Internet users' privacy, the new complaint claims mobile marketers are engaging in behavioral targeting, location-based targeting, user tracking and mobile analytics, audience segmentation and data mining to build profiles of 267 million mobile communications users in the U.S. to better target them for online ads based on their behavior and location.

Azuki Systems, Cellfire, Velti, ChaCha, Acuity, Tanla Mobile are cited in the complaint as technology providers enabling these activities.

In an example of what is old is new, Google also pops up, as the CDD and USPIRG cite comments from Google mobile product manager Sumit Agarwal to bolster their case that not only is mobile advertising powerful, but enabling companies are aware of potential privacy threats. The concerns wrote in their complaint that Agarwal:

... Put it best when he called the mobile phone "the ultimate ad vehicle. It's the first one ever in the history of the planet that people go to bed with. It's ubiquitous across the world, across demographics, across age groups. People are giving these things to ever-younger children for safety and communication." Nor is Google unaware of the privacy implications of this most personal of electronic gadgets: "We have to be very respectful of privacy and give users lots of control," Agarwal observes, "but it can know where you've been, where you've lingered, what store you stopped in, what car dealership you visited. It goes beyond any traditional advertising... ."

Hey, when it comes to Web services on the desktop or mobile device, you can't go wrong knocking Internet giant Google, which seems to have a hand in anything remotely concerning the consumer-facing Web. Thanks to its paid search dynasty, Google is a frequent target of consumer watchdogs who patrol the Internet.

Google, which doubled down on mobile Web services in 2008 with the launch of a T-Mobile G1 phone based on its Android mobile operating system, appears unfazed by the report. A spokesperson said in response to the report:

At Google we are keenly aware of the trust that our users place in us and of our responsibility to protect their privacy. Transparency and choice are the principles on which all Google's privacy practices are based. So whether it's for a desktop or for a mobile platform or device, we design products that give users meaningful choices about how they use our services and what information they provide to us, and let users know when products may collect personally identifiable information so that they can make informed choices about how to use our products. We want to work with industry on developing best practices on privacy and we welcome all efforts to do that.

Sounds like an invitation to work with CDD and USPIRG. Now if these groups would only stop asking the FTC to sue everybody into technological stasis. What do I mean by that? Mobile marketing and advertising are so nascent that no one has figured out the best ways to propagate ads on the third-screen.

The field is really green and has the potential for more innovation. Why stifle that with a lot of restrictions? Seems to me the watchdogs are crying wolf when the sheep are miles away.

I suppose if nothing else, CDD and USPIRG want to plant a seed for the Obama Administration, having failed to get the FTC under Bush on board in time to meet its requests for action.

*UPDATE: CDD Executive Director Jeffrey Chester responded to my comment: Our 2006 FTC complaint at FTC led to the agency's current investigation into online advertising; a final report and new self-regulatory standards are to be issued by the FTC any day. So we did get the Bush FTC to act. But more is required. As our report well documents, the mobile data collection and targeting system has grown significantly. It's time for consumer and privacy protections.

He added in the report:

We now ask that the FTC also act to protect consumers from a growing number of deceptive and unfair marketing practices and the resultant threats to consumer privacy that are a part of the rapidly growing U.S. mobile advertising landscape. The commission cannot continue to sit idly by and wait--as it has done with the concerns over privacy raised by online advertising in the past--until market practices are so well ingrained that it is all but impossible to address them.

Oh, the FTC can, and probably will. Remember, Obama is more tech-friendly than Bush and loves Google.

Let's not forget, the regulatory bodies such as the European Commission are still wrangling with Google, Yahoo and Microsoft over data retention for search log data.

Adding the mobile wrinkle now will only be met with dull gazes, but I suppose it can't hurt to plant the seed before Obama and Google get down at too many parties. |

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