Groups Target FTC About ‘Privacy Threats’

Not everyone is as excited as advertisers and agencies are about “real time” ad delivery—the idea that Internet users can be targeted one by one in miliseconds—based on their recent Web surfing habits.

On Thursday (April 8), three different advocacy groups concerned with consumer privacy filed complaints with the Federal Trade Commission, specifically in regards to real-time ad bidding. The groups—The U.S. Public Interest Research Group, the Center for Digital Democracy and the World Privacy Forum—urged the FTC to investigate what they deemed as “privacy threats” generated by “real-time” behavioral targeting, specifically calling out Google and Yahoo.

Among the other companies identified by the the three groups were the yield-optimization upstarts PubMatic and The Rubicon Project, as well as the data exchange firm eXelate and the bidding technology company MediaMath.

In a 32-page document filed to the FTC, the three groups contend that consumers are largely in the dark about how sophisticated behavioral ad targeting is, and how data gathered on users’ Web habits is being blended with data from their real world activities.

“Consumers will be most shocked to learn that companies are instantaneously combining the details of their online lives with information from previously unconnected offline databases without their knowledge, let alone consent,” said Ed Mierzwinski, U.S. PIRG consumer program director. “In just the last few years, a growing and barely regulated network of sellers and marketers has gained massive information advantages over consumers.”

The report even goes as far to claim that Web users are being robbed of the ability to “reap the financial benefits of their own data”—implying that perhaps users should be paid for or could even profit from their own Web surfing data.
Of course, the online advertising industry is keenly aware that the federal government is paying it an increased amount of scrutiny. Lawmakers are expected to introduce a bill in the coming weeks aimed at providing consumer privacy guidelines that should impact both publishers and advertisers. And many expect the FTC to start playing a more active role in policing the space.

But it remains to be seen how much power and influence advocacy groups will have over the FTC, which is also working directly with top industry organization like the Interactive Advertising Bureau to address privacy issues.

That didn’t stop CDD executive director Jeff Chester from charging the FTC with being outright negligent. “FTC inaction has encouraged the data collection and ad targeting industry to expand the use of consumer information for personalized advertising,” he said. “The commission’s failure to adequately protect the privacy of consumer transactions online, including those that involve financial and other sensitive information, is irresponsible. U.S. consumers, especially during this time of economic hardship for so many, need a commission that is proactive in protecting their interests.”