Web Companies Say Don’t Panic About ‘Do Not Track’

The digital community doesn’t need to worry about a “Do Not Track” list sitting on a bureaucratic server—as long as Web publishers, social and ad networks and others get serious about putting in place consumer opt-in or opt-out mechanisms.

The message of “self-regulate…or else” came out loud and clear over the last two days with the release of the Federal Trade Commission’s privacy report and “Do Not Track” hearing held by the House Energy and Commerce Subcommittee on Commerce, Trade and Consumer Protection.

The FTC’s report advocated that companies should adopt a privacy-by-design approach by simplifying privacy practices, allowing consumers to easily understand and navigate them. Consumers, it found, also need to know what information is being collected and how it will be used. While there has been some movement by companies to take online privacy mechanisms seriously, it hasn’t been fast enough for Congress or regulators.

“Self regulation has been too slow to afford consumers meaningful choices,” said David Vladeck, director of the bureau of consumer protection for the FTC. “Existing choices are hard to find and hard to use. We hope the report will stimulate discussions about the gap between consumer expectations and what is provided.”

Companies have until Jan. 31, 2011 to comment on the FTC’s report. By then, the Commerce Department may issue its report. That gives companies some breathing room.

“Companies shouldn’t be worried, but they should be trying to get ahead of it,” said Cynthia Larose, a privacy attorney and partner with Mintz Levin representing companies in information, communications and technology. “Congress knows this is terribly difficult to regulate, but they’re going to keep the stick out there.”

The Interactive Advertising Bureau and Online Publishers Association, which include hundreds of online media and technology brands, have members that are in the process of rolling out a self-regulatory privacy mechanism, allowing consumers to opt-out of ads based on tracking information.

“Those that are not respectful of [online privacy] will make it a challenge for all of us,” said Pam Horan, president of OPA, who is worried about the unintended consequences of “Do Not Track” if companies don’t act. “[We need] a universal choice mechanism for all analytics, such as geographic targeting and audience-size measures,” Horan said.

Even if the government in the future decides it needs to legislate a rules-based “Do Not Track” practice, which a few Congressional leaders have vowed to do, it doesn’t mean the end of Internet advertising and marketing as we know it. Web companies can still track; they will just need to find ways to cajole consumers to share their information.

“A certain percentage will opt out, but it will depend on how it is explained and marketed to consumers,” said Larose.

Even the “Do Not Call” registry didn’t kill telemarketing, said Doug Wolfgram, CEO for IntelliProtect, a company that sells online privacy protection services to consumers. “Being tracked online is less invasive than getting that annoying call during dinner, so I don’t believe a majority of consumers will opt out,” Wolfgram said. “The ultimate objective of a ‘do not track’ feature isn’t to block all tracking; it is to give the consumer the choice.”