* Debate hinges on do not collect versus do not target ads
* Lack of consensus could test threats of government
* Poses existential problem for Internet companies,
By Jasmin Melvin
WASHINGTON, July 23 The White House wants a "Do
Not Track" option put on websites to give consumers greater
control of their personal information online but Internet
companies and privacy groups are at odds on how tight the
controls should be.
The stalemate could lead to a legislative crackdown on
Internet privacy if left unresolved.
That has firms like Google Inc and Facebook Inc
that rely heavily on collecting user data worried that
any legislation could lead to cuts in online advertising that
would eat into their profits.
The U.S. administration has looked to an Internet standards
setting body, already eyeing a "Do Not Track" mechanism and with
an aggressive timeline in place, to corral everyone into a room
and onto teleconferences to reach a deal.
With over 10 months of talks under the group's belt, they
are still talking but are arguably no closer to an agreement
than when they started. The sides are so far apart that they
don't even agree on what "Do Not Track" means.
To privacy advocates, it is halting data collection so a
consumer can surf the Web without any prying eyes collecting
information about their online activities for economic gain. To
the industry, however, it means not targeting ads to a consumer
based on their Web viewing history, but data collection would
continue for other purposes.
The next step, if no consensus is reached by year's end,
will likely test regulatory and congressional threats of
legislation to enforce Internet privacy.
This puts Internet companies in the midst of an existential
dilemma as their business models rely on consumers parting with
their personal information to bolster ad revenue.
"We want to reduce the profile, the data footprint of
citizens who increasingly spend a lot of time online today,"
said Jeffrey Chester, executive director of the Center for
Digital Democracy, a nonprofit active in policing privacy.
Online advertisers and Web companies say such data is now
the lifeblood of the Internet.
"If you get rid of that, you kill the Internet. It's just
that simple," Linda Woolley, executive vice president of
government affairs at the Direct Marketing Association, said of
the dangers of ceasing data collection.
What some once viewed as a sideline - collecting and selling
consumers' data to advertisers - the Internet ecosystem took on
as its main source of revenue, in return providing consumers
with free Web content and services.
With more sophisticated data mining, more prevalent ad
targeting and more cognizant Internet users, companies are
starting to see fallout from this relatively novel way of doing
Any clamp down on data collection deals a blow to their
bottom lines. Targeting has almost tripled what brands pay
websites to run ads, and companies like Google and Facebook rely
heavily on advertising for the bulk of their revenue.
U.S. online ad revenue was just shy of $15 billion in the
first half of 2011, 23 percent higher than the previous year.
Yet abuses in which companies are not honest about how they
exploit their users' movements on the Internet threaten to drive
users away, another hit to revenue.
"If you have a business model that relies on spying on your
customers, as people begin to understand that, there will be
tremendous push back," said John Simpson, privacy project
director for the nonprofit Consumer Watchdog.
HOW WE GOT HERE
Some browsers, including Mozilla's Firefox, Microsoft Corp's
Internet Explorer and Apple Inc's Safari,
allow consumers to indicate that they do not want to be tracked
as they surf the Web. But under current regulations, websites
and advertisers can ignore these requests.
The Obama administration has called for a universal "Do Not
Track" system with industry buy-in.
The concept has floated around since consumer groups asked
the U.S. Federal Trade Commission(FTC) in 2007 to create a "Do
Not Track" list for online advertisers, which would work like
the "Do Not Call" registry that caused telemarketing industry
The FTC first endorsed a "Do Not Track" tool that would
convey directly to websites the user's choice to opt out of
tracking in a preliminary staff report released in December
In recent years Internet giants have gotten into trouble for
various privacy abuses, including secretly tracking users'
locations and selling consumers' data to advertisers without
their knowledge. Both Google, the world's No. 1 search engine,
and Facebook, the No. 1 social networking site, reached
settlements with the FTC last year because of privacy problems.
The faux pas got regulators' attention. The White House and
FTC unveiled privacy frameworks earlier this year to curtail
abuses, but they relied heavily on voluntary commitments by
industry players to responsibly and transparently handle
information about the online activities of consumers.
The frameworks came with a caveat: "We are confident that
consumers will have an easy to use and effective Do Not Track
option by the end of the year because companies are moving
forward expeditiously to make it happen and because lawmakers
will want to enact legislation if they don't," FTC Chairman Jon
Leibowitz said in March.
The administration is now looking to the World Wide Web
Consortium (W3C), an international standards organization for
the Web, to produce a "Do Not Track" tool by year's end.
The group began talks with Internet firms, online
advertisers and privacy advocates last September to define how a
"Do Not Track" mechanism would work.
The added pressure from regulators in March has not
triggered agreement. Instead, two very different visions have
emerged - do not collect versus do not target ads.
The W3C wrapped up what was supposed to be its fifth and
last face-to-face meeting of its Tracking Protection Working
Group on June 22. With no consensus reached, the W3C has
extended the group's charter. Weekly conference calls resumed in
July with another face-to-face meeting likely in the fall.
TWO DIFFERENT VISIONS
Industry heavyweights say the Obama administration's push
for a clear tool to opt out of tracking should only give
consumers control over the type of advertising they receive.
Restricting data collection further could cause the Internet
to go dark and undermine the economic health of companies,
industry leaders argued at the June W3C meeting.
Advertisers point to a self-regulatory program already
followed by 90 percent of the ad industry that places an "icon"
on ads consumers see due to behavioral advertising.
Clicking the icon directs consumers to a website that
explains why they received the ad and gives them the option to
opt-out of receiving the company and ad network's advertising.
It does not stop data collection, only its use for targeted ads.
A coalition of online advertisers in February said its
members would honor these "Do Not Track" requests. Twitter in
May said it would support a standardized initiative to honor
requests from users who do not want to be tracked.
Yet still there is no consensus on what "Do Not Track"
The leading "Do Not Track" proposal from the Internet
industry - prepared by representatives from Google, Yahoo! Inc
and consultants - would bar companies from using
consumers' personal information to target advertising to them
across multiple websites if they opted out of tracking. It
would, however, allow them to keep collecting data.
Privacy advocates said the industry proposal is little
different from what companies are subject to now - a problem,
they say, given continued reports of misuse of consumers' data.
Consumer advocacy groups and others noted charges that
Google used special computer code, or "cookies," to trick
Apple's Safari browser so Google could monitor users who had
blocked such tracking and other reported privacy violations to
help make their case for stronger protections.
Last month they harped on findings that data collection
allows the travel site Orbitz to identify if a user is on a Mac
or PC. The online travel booking company last year began using
that data to recommend pricier hotel rooms to Mac users as
studies show Mac users on average are more affluent and willing
to pay for more expensive hotel stays.
Simpson said industry's proposal would do nothing to prevent
a user that does not want to be tracked from having their
personal information used to tailor what pricing on a website is
more dominantly displayed to them.
A proposal from privacy advocates, written by the Electronic
Frontier Foundation, Mozilla and Stanford University student
Jonathan Mayer would bar third parties - companies with ads
displayed on a page or ad networks that track users across
unrelated websites - from collecting information about a user if
they opt not to be tracked with limited exceptions like security
and fraud prevention.
Advocates said their proposal would still allow companies
that users have a direct relationship with, such as when logged
into Amazon.com or YouTube, to collect personal
information in order to give recommendations and otherwise
tailor a user's experience.
"If we can't get a reasonable agreement very soon, consumer
groups are going to go to the FTC and the European Union and
Congress and say Do Not Track is dead on arrival and we need
legislation and regulation," Chester said.
A STALEMATE RISKS LEGISLATION
European Union proposals that would give Internet users the
right to bar any collection of personal data are also putting
pressure on U.S. officials to beef up privacy safeguards.
Leibowitz has been adamant that "Do Not Track" should mean
do not collect data, with some narrow exceptions like fraud
"How exactly to get to that goal is still under discussion,
but my sense is if there's not a resolution from the
discussions, then Congress may take a look at the issue," said
Ed Felten, the FTC's chief technology officer.
The specter of legislation this year is generally viewed as
a hollow threat given the tense, gridlocked legislative
landscape. But Washington insiders say pressure from the
European Union and an escape from election-year politicking will
greatly increase the prospects for a bill to move next year.
Representatives Edward Markey and Joe Barton, co-chairmen of
the Congressional Privacy Caucus, wrote to the W3C last month
championing a "Do Not Track" definition that bars accumulating,
using and sharing personal data.
"Joe Barton is one of the most conservative Republicans in
the House of Representatives, and Ed Markey is one of the most
liberal," said Consumer Watchdog's Simpson. "The fact that those
two guys can come together on this leads me to believe that
privacy is likely to be one of the issues where there will be
bipartisan agreement about the need to do something."