U.S. trade regulator casts doubts on 'Do Not Track' on Web

WASHINGTON Tue Mar 13, 2012 9:35pm GMT

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WASHINGTON (Reuters) - Consumers hoping for a one-click option to bar advertisers from tracking them across the Web will have to wait a bit longer, according to a Federal Trade Commission official.

"I don't see any of the 'do not track' solutions as ready for prime time," FTC Commissioner Thomas Rosch said in an interview with Reuters.

The FTC is slated to unveil new privacy recommendations in the coming days, but not all of the members of the 4-person panel are on board with certain proposals.

Rosch, a Republican, has repeatedly expressed reservations with FTC proposals released in a preliminary staff report in December 2010 meant to protect the privacy of consumers online.

The report supported a consumer choice mechanism that would convey directly to websites the user's choice to opt out of tracking, referred to as Do Not Track.

Washington lobbyists on both sides of the privacy debate have said in private that a lack of consensus on "do not track" has added to the delay in releasing the agency's long-awaited final report.

Rosch previously expressed doubts about the feasibility of implementing a "do not track" system from a technological standpoint.

He has also called on the agency to take a step back from championing a "do not track" system and instead investigate online advertising and gather more information on what data advertisers collect and how they use it.

Data collection on the Internet allows advertisers to target users in a demographic or who are more likely to buy their product. These ads often subsidize Web content, but U.S. regulators have accused Internet companies of compromising user privacy to attract advertisers and increase revenue.

Internet companies such as Google Inc, Apple Inc and Facebook, as well as a plethora of less visible companies engaged in behavioural advertising, are fending off reforms from the White House, government agencies, and Democratic and Republican lawmakers.

At stake is a billion-dollar industry that has been threatened by embarrassing revelations about Internet companies secretly tracking user locations, selling data to advertisers without the knowledge of consumers, and accusations of other privacy violations.

The Association of National Advertisers spent more on lobbying during the final three months of 2011 - $1.6 million -than it spent during all of 2010 - $1.1 million.

Total lobbying expenditures, according to disclosure reports on file with Congress, reached $2.4 million last year for the ad industry's oldest trade group.

The advertising industry has argued it has made great strides in beefing up privacy protection. It has sought to avoid government intervention, pushing self-regulation to address privacy concerns.

Rosch said that, while self-regulation is not a bad thing in some instances, in this context, "to my way of thinking, it's an empty promise."

INDUSTRY PROPOSAL

A coalition of online advertisers said last month its members would honour "do not track" requests using tools in Google, Microsoft Corp and Firefox browsers, something the FTC has been advocating since 2010.

Rosch told Reuters he would reserve judgment on the industry-backed plan.

Privacy advocates said the advertising group's plan would only stop showing consumers targeted ads, but it would not end tracking. Consumers should avoid thinking their Internet activity would be totally shielded, consumer groups argued.

"Consumer groups are extremely alarmed that the industry version will be a kind of digital bait and switch and not give people a meaningful way of no longer having their data collected and tracked online," said Jeff Chester, executive director of the Center for Digital Democracy.

(Additional reporting by Diane Bartz; editing by Andre Grenon)