Privacy Groups Ask FTC to Toss Cookies
By: Daniel R. Ballon, Ph.D
11.5.2007
A coalition of nine consumer privacy groups requested last week that the U.S. Federal Trade Commission establish a "Do Not Track" list to protect Internet users from targeted online advertising. Unlike the FTC's popular "Do Not Call" registry which blocks unsolicited telemarketing calls, the proposed "Do Not Track" rules will not only increase unwanted advertisements, but will also restrict consumer freedom and significantly raise the price of online goods and services. Targeted advertising offers consumers a more personalized online experience by selectively displaying only those advertisements which are relevant to a user’s interests. As a result, consumers are more likely to find these ads useful, and advertisers more efficiently reach their target audience. In order to achieve these mutual benefits, advertisers collect anonymous information about customers’ preferences based on their surfing and shopping habits. This information is logged in small files called ‘cookies,’ which are shared between a user’s browser and the advertiser. While these cookies contain no information about a consumer’s identity, such as name or address, some may find any tracking of online behavior to be an unacceptable invasion of privacy. If the FTC created a system akin to the “Do Not Call” registry, these users could add their names to a simple, consolidated database, and exempt themselves from intrusive targeted advertisements. Unfortunately, this is not at all how the “Do Not Track” rules will work. A comparison between "Do Not Call" and "Do Not Track" reveals that the proposed registry not only fails to provide any additional protection for consumers, but actually causes significant harm:
1) If telephones had a “Do Not Call” switch, there would be no need for a federal “Do Not Call” program. Customers could merely toggle their phones to accept or block telemarketing calls according to their preferences. While phones may lack this feature, Internet browsers are equipped with all the tools a user needs to prevent online tracking. Customers can choose to block the practice altogether, or only on selected sites. 2) The “Do Not Track” program is far more complex and expensive than “Do Not Call.” Because all information collected by advertisers is anonymous, there would be no way to match online consumers with names in a federal database. Instead, the database would contain a list of advertisers, not consumers. The FTC would then somehow enable consumers to selectively block the advertisers on the list. The obvious problem with this approach is that web browsers weren’t designed with the FTC in mind. Commercial browsers are unlikely to integrate this function, considering that most companies benefit from targeted advertising. Therefore, the government would need to design and distribute its own browser or plugin to ensure compatibility with the government database. Those concerned about privacy should have no qualms about downloading the government’s web browser. After all, the government would never, ever, ever use technology to violate the privacy of its citizens. 3) Telemarketers don’t pay your phone bill. Therefore, there are few downsides to blocking these calls. On the Internet, however, $31 billion will be spent this year on advertising. Many popular sites, such as news, e-mail, social networking, and search engines, are supported by advertising revenue. As a result, customers can access these services for free. If the government facilitates blocking of all advertisers en masse, many sites would be required to charge users a subscription fee for access. This wouldn’t sit well with most consumers. According to a recent Ponemon Institute survey, 86 percent of respondents would rather accept targeted advertisements than pay for content. 4) Unlike telemarketing, customers enjoy targeted advertising. The movement to create a “Do Not Call” registry was driven largely by strong public disdain of telemarketing (Gallup ranks telemarketers dead last in an opinion survey of professions). In contrast, a ChoiceStream survey finds that 80 percent of consumers are interested in receiving personalized content online. 5) “Do Not Call” eliminated a nuisance, while “Do Not Track” will create one. If consumers opt to block targeted advertisements, they will not experience a decrease in the number of ads they see. Instead, they will be bombarded with unwanted generic advertisements which likely have little relevance to their preferences and interests. Because generic advertisements bring in less revenue than targeted advertisements, advertisers will be forced to use more of them. 6) Blocking telemarketing calls does not make the phone line go dead. Consumers who opt into “Do Not Track,” however, could very well find that their favorite web sites no longer load. Because many sites are supported by advertising revenue, these sites can make accepting cookies a term of use. If the FTC’s software blocks cookies from that site’s advertisers, the service will not function (Google’s popular e-mail platform, Gmail, is one example of a site which requires the user to accept cookies). The “Do Not Track” rules are ‘all or nothing.’ If a consumer opts in, all registered advertisers would be irreversibly blocked. Therefore, the government would take away a user’s freedom to accept targeted advertisements in certain circumstances, when the site provides that user a valuable service. Supporters of “Do Not Track” believe that “consumers must be free to act in their own self-interest.” Putting government in charge of managing privacy, however, runs contrary to this goal. Privacy advocates should focus their efforts on ensuring that advertisers disclose their techniques in clear, open, and accessible terms. Consumers must be educated about these techniques and the abundant tools available for customizing privacy settings to satisfy individual preferences. This will truly empower consumers with the freedom to “act in their own self-interest.”
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