Regulation

FTC Finalizes Self-Regulatory Principles for Behavioral Advertising

The U.S. Federal Trade Commission has released a finalized report (PDF) on their self-regulatory principles of behavioral advertising. Behavioral advertising involves using information about consumers’ online activities in order to deliver tailored advertising. The guidelines, which were originally issued in December 2007, were revised based on 63 comments by approximately 87 stakeholders. The major change in the principles was to remove first party, “behavioral advertising by and at a single website”, and contextual advertising, “advertising based on a consumer’s current visit to a single web page or a single search query that involves no retention of data about the consumer’s online activities beyond that necessary for the immediate delivery of an ad or search result”, from the scope of the principles. The U.S. Federal Trade Commission has released a finalized version of their self-regulatory principles of behavioral advertising. Behavioral advertising involves using information about consumers’ online activities in order to deliver tailored advertising. The guidelines, which were originally issued in December 2007, were revised based on 63 comments by approximately 87 stakeholders. The major change in the final version was to remove first party, “behavioral advertising by and at a single website”, and contextual advertising, “advertising based on a consumer’s current visit to a single web page or a single search query that involves no retention of data about the consumer’s online activities beyond that necessary for the immediate delivery of an ad or search result”, from the scope of the principles. The FTC’s self-regulatory principles are group under four central tenets: Transparency and Consumer Control; Reasonable Security, and Limited Data Retention, for Consumer Data; Affirmative Express Consent for Material Changes to Existing Privacy
Promises; and Affirmative Express Consent to (or Prohibition Against) Using Sensitive
Data for Behavioral Advertising.

In an interview with the New York Times, the acting director of the FTC’s bureau of consumer protection Eileen Harrington called on Internet companies to better explain how they collect and use data. She said that it is commonplace for them to place that “information in the midst of lengthy and hard-to-understand privacy policies” and that “We know advertisers can get their messages across when they want to. They darn better want to get this message across: ‘This is what we are collecting and this is how we are using it.'”

Comcast Appeals FCC Net Neutrality Related Sanctions

The New York Times Bits Blog reports that Comcast filed a suit in the United States Court of Appeals in Washington to challenge the FCC’s sanctions over it’s throttling of certain protocols on customers connections. Comcast is challenging the FCC’s ability to sanctions companies without first publishing a rule about the issue at hand. Under the current FCC chairman Kevin Martin, the FCC has published broad principles and has only taken action when it finds practices it objects to. Comcast complains that by bypassing formal rules, their ability to put forth their side of issue is restricted.

FCC Rules Comcast Traffic Throttling is Unlawful

In a 3-2 ruling, the Federal Communication Commission has ruled that Comcast’s throttling of certain protocols on customers connections is unlawful according to an article by CNET News. This is the first time the FCC has ruled that a U.S. ISP has violated net-neutrality rules. The Republican Chairman and the two Democrats on the Commission voted in favor of the ruling, with the other two Republicans members dissenting. Comcast will not be fined, but will be required to “disclose the details of its discriminatory network management practices to the Commission”, “submit a compliance plan describing how it intends to stop these discriminatory management practices by the end of the year”, and “disclose to customers and the Commission the network management practices that will replace current practices” according to a summary of the FCC’s order.

FTC Director Of Consumer Protection Supports Self Regulation of Online Advertising

In an interview with the New York Times Bits Blog, the director of the Federal Trade Commission’s bureau of consumer protection Lydia Parnes said that she support self regulation of online advertising. Parnes is concerned that any legislation would be based “taking a snapshot of the way the market works at a specific time,” and would be quickly outdated by pace of change in online advertising. She also questioned how much consumers understand the connection between tracking and relevant advertising, saying: “If you ask people whether they want to be trace when they are online they generally say they do not. But if you ask them whether they want a free Internet they say yes. And if you ask them if they want relevant advertising, they say yes.” She also said that she felt that the FTC could be very persuasive in getting companies to follow general principles that the FTC proposes without requiring legislation.

FCC Chairman Recommends Sanctions Over Comcast Traffic Throttling

Federal Communications Commission Chairman Kevin Martin recommended that Comcast be sanctioned over its throttling of certain protocols on customers connections according to a New York Times article. Martin’s recommendation to Commission is that Comcast not be fined, but be required to change it practices and provide details in what it had done in the past. The recommendation shows Martin support for network neutrality, the practice of not favoring certain uses of Internet connections. In an interview with the Times Martin said: “The Internet is based upon the idea that consumers can go anywhere they want and access any content they want, When they show they are blocking access to some sort of content, they have the burden to show that what they are doing is reasonable.” He also told the Times that providers needed to tell customers of any limits on bandwidth that they can use. The Commission is scheduled to make its decision on August 1.