The Federal Trade Commission (F.T.C.) recently issued an online privacy report earlier this month that seeks to protect the privacy rights of consumers. The report is a response to the ineffective current industry policies of protecting one’s privacy through self-regulation. Instead of having consumers consent to long legal disclosures, which they don’t read anyway, the report aims to provide consumers with privacy protection and thus reducing their liability.
In this report, the F.T.C. recommends companies to have a “privacy by design” approach by building privacy protections into their everyday business practices. “Such protections include reasonable security for consumer data, limited collection and retention of such data, and reasonable procedures to promote data accuracy.” What exactly is reasonable? This is a very ambiguous term and it will be very unclear as to what would be considered legal versus illegal. I know that it’s very hard to explicitly state each and every situation that would apply to this “reasonableness,” but this would create lots of confusion. One thing is for sure, that consumers would be better off than they were once before.
The report also discusses the use of a “Do Not Track” button, which would allow consumers the choice of being tracked and the ability to block advertisers from collecting their information to be used for target advertising. This would be achieved by having a cookie placed on the consumer’s browser indicating their option of being tracked or not. However, according to the New York Times article, these opt-out cookies are hard to manage and work poorly because “they often get deleted when people try to clear out advertiser cookies.”
So how would this new legislation affect both consumers and companies? Consumers will have their privacy protected and will have reduced amount of advertisements and spams. The company’s marketers and advertisers, on the other hand, spend a lot of time and money to research consumer trends and then have special advertising for a specific target market. Companies will be ineffective and will have to eliminate personalized advertisements. In addition, if ads are reduced, many websites that primarily depend on advertising revenue will suffer as a result.
Companies such as Microsoft, Mozilla, and Google have already agreed to work with the F.T.C. in order to provide consumers with more privacy protection. It will be interesting to see whether this would actually work once these recommendations are put into use.
Sources:
Federal Trade Commission. “FTC Staff Issues Privacy Report Offers Framework for Consumers, Businesses, and Policymakers.” http://www.ftc.gov/opa/2010/12/privacyreport.shtm
Richmond, Riva. “What if There Was a Do-Not-Track List for Online Browsing?” http://gadgetwise.blogs.nytimes.com/2010/12/02/what-if-there-was-a-do-not-track-list-for-online-browsing/?scp=4&sq=ftc%20issues%20privacy%20report&st=cse
