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FTC Commissioner Questions Privacy Report

29 May, 2013 By: Doug McPherson

WASHINGTON – Federal Trade Commission (FTC) commissioner Maureen Ohlhausen said last week the commission's 2012 privacy recommendations could unintentionally hurt smaller online ad companies, saying the FTC didn’t “address the possible competitive effects of its recommendation.”

The report, issued before she was sworn in, asks ad industry execs to create a universal do-not-track tool that will let consumers easily opt out of all online behavioral advertising.

“New privacy restrictions may have an effect on competition by favoring entrenched entities that already have information, over new entities,” she said. “A policy that limits the ability of advertisers to access new information, to reach consumers, can have unintended effects in the marketplace.”

Some third-party ad networks agree, arguing policies that prevent them from collecting information could put them at a disadvantage compared to companies that collect information in their capacity as “first parties,” such as Amazon. Typically, companies that operate sites visited by consumers are considered first parties, while ad networks that collect data at those sites are considered third parties.

But some first parties, like Amazon, are now operating their own ad networks, raising questions about what standards should apply when they collect information to send people targeted ads.

Ohlhausen also said she disagrees with the agency's 2012 recommendation that Congress consider enacting a baseline privacy law. “I don't currently support a baseline privacy bill, but am not against privacy legislation per se,” she said.

She added that she supports the online ad industry's efforts at self-regulation, as a means of protecting consumers' privacy. “A voluntary self-regulatory process should operate without undue government involvement,” she said.

Ohlhausen also revealed the FTC won't immediately begin enforcing its newly revised online privacy rule July 1. Last month, the FTC denied online industry trade groups' efforts to delay implementation of the revised Children’s Online Privacy Protection Act rule, confirming that child-directed websites and affiliated third-party services would have until July 1 to comply with their expanded obligations.

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