The Federal Trade Commission issued a final report addressing consumers' online privacy in which it praised the ad industry's efforts to self-regulate while warning that there could be a bigger push for legislation if the industry doesn't keep its end of the bargain.
Like a draft report the FTC issued in December 2010, the 75-page final report sets out best practices for how companies and policymakers should protect online privacy. At the core of the recommendations is a Do Not Track option to give consumers greater control over the collection and use of their personal data. The report also recommended that Congress consider enacting general baseline privacy legislation.
The agency was supportive of the ad industry's self-regulation track record and its commitment to expand the program to honor DNT browser headers, an initiative announced last month.
"We are confident that consumers will have an easy-to-use and effective Do Not Track option by the end of the year because companies are moving forward expeditiously to make it happen," Jon Leibowitz, the chairman of the FTC, said during a press conference.
While recognizing the "extraordinary strides" the Digital Advertising Alliance has made in the past year rolling out the ad-choices icon (which allows consumers to opt out of targeted advertising), Leibowitz's praise also came with a warning.
"DNT needs to mean 'do not collect', not just 'advertise back,'" he said. "The industry recognizes that if a real DNT does not come to fruition by the end of the year, there will be a lot of support legislatively for DNT."
The ad industry, which hustled since the FTC's draft report to deliver more than 1 trillion ads every month with the icon, is well aware of the regulators' warning and what it needs to do to keep legislation at bay.
"We look forward to continuing our work with the commission in this area, as the threat of unintended consequences is high when you propose new Internet regulations," said Mike Zaneis, svp and general counsel for the Interactive Advertising Bureau, part of the DAA. "Virtually every publisher site, advertiser, ad network or analytics firm collects or shares data with other parties in order to make the digital economy work. We would not want to see legislation introduced that would harm the most fundamental operations of the Internet."
The FTC's final report laid out three principles companies should follow to protect consumers' privacy, including incorporating privacy protections as products and services are developed (privacy by design); offering consumers a choice for how information is collected and shared; and being transparent in how privacy details are disclosed.
"Your computer is your property. No one has the right to put anything on it that you don't want. The rules of the road need to be clear," Leibowitz said.
The FTC reviewed more than 453 comments before issuing its final report.