The FTC's "Do Not Track" Proposal Already Having an Effect

Last Updated Dec 7, 2010 11:15 AM EST

One of the bigger headlines of last week -- at least for privacy wonks -- was the Federal Trade Commission's decision to propose a "Do Not Track" initiative. Like the "Do Not Call" registry of a few years back that silenced many a telemarketing call, "Do Not Track" would allow consumers to opt out of being tracked online. That would potentially do great harm to the $25 billion interactive ad industry, because in online, it's all about targeting.

So will "Do Not Track" ever happen? Hard to say. Some doubt its feasibility, but another reason it might not happen is that, even in preliminary form, it is already having its desired effect -- which is to make sure the interactive advertising industry gets dead serious about self-regulation and efforts that make the collection of data more transparent. Though the industry hasn't exactly ignored self-regulation in the past, there have been several signs in the last few months that the industry is beginning to take attacks on the targeted media that is its lifeblood more seriously:

1. Major industry trade groups, from the American Association of Advertising Agencies to the Association of National Advertisers, launched an Advertising Option Icon. Pictured here, it's a sort of "Good Housekeeping" Seal of Approval which lets consumers know that a site is collecting behavioral data, but adhering to industry principles in doing so. It also includes an opt-out option, which is described in the group's release: "By clicking on [the Icon], consumers will be able to link to a clear disclosure statement regarding the company's online behavioral advertising data collection and use practices as well as an easy-to-use opt-out option."

2. Facebook swiftly took action when it became clear in October that some developers had been sharing information gleaned on the site with third-parties, suspending some for six months.

3. A number of companies who collect online data have gone public with what they are calling The Open Data Partnership, which is creating a portal, due to launch in January, of what data is being collected by participating companies. Though most of the companies, which include BlueKai and Lotame, are only well-known in industry circles, giving a consumers a window into tracking data is a big step toward transparency.

Of course, the unstated goal of all of these initiatives is that the government will go worry about something else -- like cutting the Federal deficit -- but the hard part is that, like recent legislation to limit the volume of TV commercials, protecting consumers from evil online data collectors is a bi-partisan issue. Everyone wants in. There are several bills floating around Congress now, mostly drafted by Democrats, that also aim to regulate the industry, but, not to be outdone, the Republicans said immediately after the election that the issue wasn't going to be dropped because of the shift in power.

On the other hand, FTC chairman Jon Liebowitz would clearly like to see the industry take care of these issues themselves. He said last week: "we're going to give these companies a little time [to self-regulate], but we'd like to see them work a lot faster." They are, Jon, they are.