Net Marketers Propose Online Privacy Reform
Hoping to fend off government regulation of the growing world of digital commerce, online marketers are mobilizing to show that their nascent industry is capable of protecting consumer privacy on the Internet.
Digital marketers, in advance Federal Trade Commission hearings that begin Tuesday, are proposing various reforms that would give consumers greater control over information collected about them in cyberspace.
Meanwhile, Lucent Technologies plans to announce Tuesday technology that furthers privacy protection by creating aliases for consumers who use the Internet. The company will make its Personalized Web Assistant available on the Internet for free.
These steps come in response to mounting concerns about how information is being amassed about digital consumers--often without their knowledge. Through use of tracking technology, online marketers can follow consumers as they travel around the World Wide Web, recording their activity to determine consumers’ tastes and interests. Marketers use the information to target pitches to consumers most receptive to them.
Privacy activists, fearing potential abuse, have called for federal controls on the use of digital data. They want rules barring marketers from collecting or sharing information about consumers without explicit permission from them.
“Voluntary guidelines can be useful, but there is no reason to believe they will rein in folks determined to invade privacy or steal IDs or create profiles about you that would make you uncomfortable,” said Jean Ann Fox of the Consumer Federation of America.
But marketers contend that the worst abuses--such as identity theft--are already prohibited under federal law. They say voluntary rules that allow them to efficiently collect data can protect consumers without stifling commerce on the Internet, a marketplace some believe could approach $6 billion by 2000. It is less than $1 billion today.
“I think we want to be careful about throwing the baby out with the bathwater,” said Chris Evans, chief executive of Accipiter, a North Carolina-based provider of tracking software. “If we had to ask permission every time we collected information, it would be bound to break down the Web.”
The FTC, which takes up the issue this week, would prefer an industry solution combining technological safeguards with ethical guidelines. But a movement is afoot in Congress to seek a regulatory solution.
Rep. Edward J. Markey (D-Mass.) plans to introduce legislation this week that would require electronic marketers to notify consumers when information is being collected and how it will be used. The legislation, which also applies to telephones, television and satellite transmission, would give consumers the right to restrict collection and distribution of information about them.
Online marketers track consumers mostly through use of a software feature called cookies. Merchants say cookies aid digital commerce by allowing them to track what customers do on their sites. The next time the customer visits, the merchant can use information recorded on cookies to tailor merchandise or advertising pitches to the customer.
Newer versions of browsing software from industry leader Netscape Communications Corp. alert consumers when a merchant wants to send a cookie file to their hard drives. But many Internet users find the warning system cumbersome and turn it off.
“It can quickly become too annoying to accept or deny each and every one,” wrote Marc Slayton, columnist for the online magazine HotWired. “Especially when surfing a site that attempts to set several Cookies per page.”
Meanwhile, marketers have become increasing adept at using cookies. Companies such as New York-based DoubleClick have strung Web sites together into networks, allowing them to track Internet surfers by an ID number contained in cookies as they move from one site on the network to another. The information on anonymous Web visitors is used to sharply target ads.
Consumer advocates worry that by combining tracking data with other information not stored on cookies--such as names and e-mail addresses--merchants could compile detailed dossiers on unwitting consumers.
They say, for example, that tracking data on visitors to sites about diseases could be combined with identifying information obtained through online questionnaires and marketed to drug companies or insurers.
Digital merchants say such Orwellian fears are overblown. But they agree there is a need for privacy protections, not only to prevent regulation but to encourage commerce on the Web.
According to a survey commissioned by eTrust, a certification organization jointly sponsored by the Electronic Frontier Foundation and CommerceNet, only 15% of Web surfers purchase merchandise online because of privacy concerns.
However, there is no agreement among digital marketers on how to ensure privacy--a division that if left unresolved could force the government to act. Palo Alto-based eTrust, for its part, will announce Tuesday a certification program for online merchants.
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COOKIE CUTTERS
Columnist Kim Komando describes ways to control cookies. D5
