FTC, Marketers Take Action to Get Arms Around Booming Mobile Privacy Issue
The FTC and marketers each are working to get a handle on data practices in mobile, seen as a huge new privacy frontier, officials said Tuesday. “We have nonpublic investigations in this area,” said Jessica Rich, deputy director of the commission’s Consumer Protection Bureau, on a teleconference held by the American Bar Association’s science and technology law section. There’s “not enough effort being made to address privacy in this space,” and it’s “just going to get bigger and bigger” as a data privacy issue, she said.
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The broad Digital Advertising Alliance is looking into extending into new mobile uses the Advertising Option Icon as a self-regulatory measure for disclosure of the collection and use of consumer information online and opt-outs from targeted advertising, said Jerry Cerasale, senior vice president-government affairs at the Direct Marketing Association, a participant in the effort. But “it’s going to take time,” because mobile involves so many kinds of companies, he said.
"There are so many unique factors that raise the stakes” in mobile, Rich said. “It’s always on. It’s always with you. It’s very personal. … It could be collecting information all the time,” including users’ locations. “Multiple parties can collect the data,” openly or “behind the scenes,” she said. In practice, “there’s far more data collected that is needed for the purpose,” Rich said. And screens are too small for privacy policies like those on the Web, she said. The flip side is that mobile “opens a whole realm of new type of advertising,” hitting consumers specifically when they are in particular places, Cerasale said.
Cerasale expressed disappointment when Rich said the FTC continues watching to see how well marketers police themselves before deciding about federal regulation, since the icon program is well along. “We've reached over a trillion impressions already,” he said. The effort has been beefed up by making persistent the cookie that carries out a user’s expressed preference, Cerasale said. His association and the FTC “are not in disagreement,” at least on principle, he said. “Hopefully, we are working together.” But Rich said an opt-out should prevent the use of a consumer’s information for marketing purposes beyond just targeted advertising, which the icon program doesn’t do. “You can’t cut off collection altogether,” because user data are needed to provide the underlying services, but if a consumer opts out, information shouldn’t be used for any other purposes, she said.
Social networking is another booming arena for marketing and related privacy problems, speakers said. The situation “raises concerns” at the FTC, Rich said. “Many practices are invisible” -- information-sharing with advertisers isn’t well-known -- and users are given few significant choices, she said. Teens are heavy users of social networks, “and they don’t always have the kind of judgment” needed “about tradeoffs on data collection,” Rich said. And “mobile will raise a lot of issues that will now compound the social-media concerns,” she said. Fortunately, the well-established mechanism of preference settings may offer a good way for members to control information, Rich said. “We need a lot of work” in the industry on social-network marketing, including referrals of marketers by network members to their friends, Cerasale acknowledged.