Representative Jackie Speier (D-Ca.) introduced a bill this month called the “Do Not Track Me Online Act of 2011.” In the title alone, the bill sounds very appealing for consumers, but the context of it raises some potentially harmful concerns for both consumers and advertisers.
The bill hopes to protect consumer privacy by providing an option that is said to be equivalent to be the National Do Not Call Registry offline. Although several privacy groups have already spoken out in support of the policy, if passed, it would directly impact behavioral targeting that advertisers use.
According to Marc Oestreich, a Legislative Specialist for Technology Policy at The Heartland Institute, companies spent more than $22 billion on online advertising in 2009. He pointed out that a large portion of this amount was attributed to behavioral advertising and contextual advertising, both of which allow advertisers to reach a targeted, niche audience.
“I think that Jackie Speier and a lot of these privacy groups fail to understand the huge benefit that that has for the Internet marketplace and for people with the ability to receive these free services online and, just in general, to get advertising that fits your personality,” he said.
In response to complaints, the FTC asked Web browser developers, in December, to give consumers the option to opt out of online tracking for advertising. Google, Mozilla, Microsoft, and Apple have all complied with the request in the latest versions of their browsers.
Oestreich also mentioned that the bill could impact many of the free Internet services that consumers depend on everyday. Behavioral advertising provides the revenue to back many of these programs, and without it, companies would likely be forced to charge for Web-based email, social networks, and other similar services.
In addition, if this legislation were passed, it would presumably lead to more regulation and government intervention. Anna Maria Virzi brought up an intriguing point on ClickZ when she wrote that critics of data-driven online advertising “overestimate the ability of business and government to protect all people all the time.”
“It is more problematic than ever because it gives them [the government] too much free reign to continue to annex more and more control over this Internet marketplace, and… I would argue that the reason the Internet marketplace has been so robust is because it’s one of the only paces that’s truly free from regulation,” Oestreich added.
Ironically, Web browser Opera conducted a survey and found that the biggest privacy concern for consumers is the government.
Many groups including the Interactive Advertising Bureau, the Direct Marketing Association, Google, and Facebook, have filed comments with the FTC that oppose the policy and argue that a self-regulatory approach is better for both advertisers and consumers.
As we wait to see what the government decides, do you think that this bill is a solution to privacy concerns? Or, do you agree with Oestreich and believe that the private market should adapt and respond to consumers’ concern on its own?