FTC to examine targeted advertising

The U.S. Federal Trade Commission (FTC) will host a two-day forum on targeted advertising in November, following a series of complaints by privacy groups.

The FTC town hall meeting is intended as a way for the agency to learn more about current practices in targeted advertising, said Jessica Rich, assistant director for the FTC’s division of privacy and identity protection. The agency wants to hear how Web advertising firms protect the personal data they collect, how they notify consumers about the data they collect, and whether the data is sold or used by other firms, the FTC said.

“Is it secure? Where it is stored?” Rich said. “Are companies following any kinds of standards? These are questions we have — and a lot of observers have.”

In November, The Center for Digital Democracy (CDD) and the U.S. Public Interest Research Group (US PIRG) filed a complaint with the FTC against Microsoft and other Web-based advertising companies, accusing them of using “unfair and deceptive” business practices to collect data about their customers.

The state of New York, the Center for Democracy and Technology, and the Electronic Privacy Information Center have also asked the FTC to examine targeted advertising, Rich said.

The CDD and US PIRG complaint accused Microsoft and other companies of violating customers’ privacy rights. “Microsoft has embarked on a wide-ranging data collection and targeting scheme that is deceptive and unfair to millions of users,” the groups said in their complaint.

Microsoft, in response, said it has a “clear, understandable” privacy policy and is committed to customer choice about privacy. A company spokeswoman wasn’t immediately available for comment on the FTC forum.

CDD called for the FTC to take action on its complaint, not host a forum.

“The idea that the FTC has to collect more data before it can act to protect consumers is absurd,” said Jeff Chester, CDD’s executive director. “Our complaint — and the substantial, almost daily, information we have submitted to the FTC since then — provides sufficient and compelling evidence for action. The FTC should be issuing rules, not invitations for an industry talkfest that will result in a delay protecting consumers.”

Asked about bad practices being used currently, Rich didn’t give a specific example. But if an online advertising firm didn’t follow its own privacy policy, that’s something the FTC could investigate, she said.

The FTC forum is scheduled for Nov. 1 and 2 in Washington, D.C. This will be the second FTC forum focused on targeted advertising, but there are new technologies since the last forum in 2000, Rich said.

This story was updated on August 6, 2007