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Senate Commerce Committee Growing Impatient with Self-regulatory Measures

April 29, 2013 – Although the Digital Advertising Alliance (DAA) has made great strides to protect consumers’ privacy online – which include its industry Self-regulatory Program for Online Behavioral Advertising and its “Your Ad Choices” public education campaign – the Senate Commerce Committee appears to be underwhelmed by companies’ self-regulation efforts and the DAA’s promise to honor “Do Not Track” requests from consumers.

“Consumers are still waiting for these Do Not Track standards. Advertisers are continuing to ignore Do Not Track headers and consumers’ requests for privacy,” said Sen. Jay Rockefeller (D-W. Va.), Chairman of the Senate Commerce Committee, at an April 24 hearing: “A Status Update on the Development of Voluntary Do-Not-Track Standards.”

“I have long expressed skepticism about the ability – or willingness – of companies to regulate themselves on behalf of consumers when it affects their bottom line,” Rockefeller said. “I disclose a generally troubling feeling I have about the nature of corporations around the chance to make money when people don’t know” what information is being collected about them, he continued.

DAA Self-regulatory Program Status

The DAA’s program is designed to provide choice to consumers regarding how they want their privacy protected. “The DAA’s efforts have helped to ensure that consumers will continue to have preferences regarding which ads they wish to see using a one-button mechanism,” said Coalition for Healthcare Communication Executive Director John Kamp. “But clearly, there is still more work to be done and stakeholders have to find common ground to move forward successfully.”

In February 2012, the DAA announced that it would begin work to recognize browser-based choices with a set of tools by which consumers could express their preferences under the DAA principles. Since then, two browser companies, Microsoft and Mozilla, have announced plans to install Do Not Track features that would automatically default to full protection without consumers having to make a choice.

DAA Managing Director Lou Mastria testified before the Senate committee that these features undermine the industry agreement made in February 2012, because they remove consumer choice – a linchpin in the agreement – from the equation.

In March 2012, the Federal Trade Commission (FTC) called on industry to step up self-regulatory practices or live with Congress stepping in. At the recent American Advertising Federation annual advertising day on Capitol Hill, FTC Chairwoman Edith Ramirez stated that the advertising industry should work with the World Wide Web Consortium (W3C) to develop a browser-based solution and praised Microsoft and Mozilla for their efforts, so it appears that support for voluntary programs may be wavering.

Although Harvey Anderson, Mozilla Senior Vice President of Business and Legal Affairs, told the committee that “industry has not moved forward quickly enough,” and that “the efficacy of the Ad Choice program remains questionable,” he did also state that “the work of the DAA should be acknowledged.”

Mastria told the committee that the DAA self-regulatory program protects consumers while also allowing them access to ad-supported content, adding that changes to the current paradigm would harm small publishers while also “chilling innovation.” He said that the DAA “is a solution provider” and the only entity that actually delivers choice for consumers.

“Today, the DAA calls on all stakeholders, including the FTC, W3C, Microsoft and Mozilla to honor the terms of the [February 2012] announcement and remove impediments that are preventing implementation of browser-driven choice for consumers,” Mastria said.

Is Legislation Needed?

Sen. Richard Blumenthal (D-Conn.) asked whether Congress should move forward with legislation in this area, because “when voluntary agreements fail to provide compliance, that’s the classic instance where a law is needed.” Mastria replied that “legislative or technological fiats are not necessarily what the Internet needs. A nimble, self-regulatory approach [like DAA’s] is exactly the kind of thing that fosters consumer trust while protecting privacy.”

He later added that the DAA program delivers “the very mechanisms” that are in Do Not Track legislation (DNT2013) introduced Feb. 28 by Rockefeller and Blumenthal. This legislation would:

  • Create a universal legal obligation for all online companies to honor consumer choice when consumers do not want anyone to collect information about their online activities;
  • Allow the FTC to pursue enforcement action against any company that does not honor this request by consumers;
  • Allow companies, upon consumer requests to not be tracked, to collect only the information that is necessary for the Web site or online service to function and be effective, but then place a  legal obligation on the online company to destroy or make anonymous the information after it is no longer needed.

“Industry needs to strongly advocate for – and deliver on – its promise to implement the levels of online privacy protection that the public is seeking,” Kamp said. “For the DAA’s program to thrive, consensus on how the program will work for all stakeholders is key.”