There has been a growing concern about the extent of data collection taking place on the Internet, oftentimes with little knowledge on the part of unsuspecting consumers. Consumer rights and privacy advocacy groups in the U.S. have been calling for federal legislation to make the collection practices more transparent and provide consumers with clearer opportunities to opt out of these data collection procedures. On July, 2009, a set of voluntary principles were endorsed by four major organizations, the American Association of Advertising Agencies (4A's), the Association of National Advertisers (ANA), the Direct Marketing Association (DMA) and the Interactive Advertising Bureau (IAB), plus the Council of Better Business Bureaus (BBB). The principles were set out in a forty-eight page publication titled, Self Regulatory Principles for Online Behavioral Advertising. - The Education Principle: calls for entities to provide consumer education about practices including the development of a web site devoted to the topic. - The Transparency Principle: requires mechanisms for disclosing information about data collection practices. - The Consumer Control Principle: calls for mechanisms to be put into place that allow a consumer to choose whether or not data is collected and whether or not it is passed onto other groups. - The Data Security Principle: requires that entities provide reasonable security for collected information. - The Material Change Principle: requires that entities inform consumers who have agreed to data collection if their policies change to become less restrictive. - The Sensitive Information principle: recognizes that some information is more sensitive and must be treated differently. It calls for higher standards for information about children and about financial and medical information. - The Accountability Principle: calls for all relevant entities to develop policies and procedures that operationalize the principles. Enforcement mechanisms have not been worked out but the plan is to develop that component during the intervening time until the principles are supposed to be adopted in 2010. Consumer advocates are basically seeing this effort as well-intentioned but essentially a fox guarding the henhouse solution that they believe will not be sufficient in terms of requirements, compliance and enforcement. They are looking to Congress to pass comprehensive legislation with strong regulatory teeth instead. They anticipate that efforts at disclosure will look similar to the disclosure that is available today, buried in the fine print of a privacy statement that is available on a website but rarely looked at and so densely written as to be effectively incomprehensible. They also feel that the information is too valuable for marketing groups to be willing to make it easy or even clear how people can stop the information from being collected. Marketing groups, on the other hand, believe that the promulgation of these principles is an excellent first step in organizing business practices to both support the reasonable collection of marketing analytic material while protecting consumers from misinformation and protecting their personal data from misuse. It is not clear who will win the race to protect consumers. For online retailers, the best advice right now is to read the material published and begin to look at how you can be sure that your practices meet the standards that have been recommended. You can find the complete document at the IAB website.
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