INTERNET PRIVACY PROCEDURES DRAW PRAISE, CRITICISM

By: Todd J. Shields Some Advocates Say Legislation Is Still Needed



Both sides of the debate over Internet privacy are finding something
to like in this week's federal approval of restraints proposed by
the online advertising industry. But regulators and privacy advocates
are calling for further action.



The Federal Trade Commission (FTC) late Thursday endorsed the procedures

developed by the Network Advertising Initiative, which represents more
than 90% of companies that place ads on the Web.



Online advertisers say that for the Internet to prosper, and for the Web
to continue delivering information without charging fees, they need to
track online habits and preferences - something revealed in part simply
by tracking what Web sites users visit.



Privacy advocates note that such data collection often takes place
without consumers' knowledge. They fear advertisers and marketers can
build a bank of information about each Web user that is so detailed it constitutes an invasion of privacy.



The proposals endorsed Thursday say companies that are part of the
initiative will let consumers choose whether advertisers may collect
information about their Web habits and interests. The FTC action does
not set government policy, although the agency can compel companies to
follow policies the firms have publicly stated.



Officials called for Congress to pass laws to ensure compliance by
companies not part of the advertisers' initiative. 'Self-regulation must
play a central part in protecting consumer online privacy,' said Jodie Bernstein, director of the FTC's Bureau of Consumer Protection.
'Legislative action is still necessary to ensure the remaining
[companies] comply.'



Advertisers applauded the FTC action, as did investors. 'We believe
that these principles allow for the continued effectiveness of Internet advertising while safeguarding user privacy,' said Jeff Connaughton, spokesperson for the Network Advertising Initiative. The principles
allow advertisers to merge profiles developed from online monitoring
with other marketing data gathered about consumers' offline behavior -
for instance, information developed from product registration cards.
Advertisers would need consumer approval before merging the data.



Such an ability came as a relief to industry leader DoubleClick, which
paid $1.7 billion last year to acquire tradition offline direct
marketer Abacus Direct Corp. DoubleClick's stock rose nearly 10% in
trading early Friday.



Some privacy advocates cast the FTC action as a step in the right
direction, among them policy analyst Ari Schwartz of the Center for
Democracy and Technology, a Washington advocacy group that seeks to
protect civil liberties online. But Schwartz urged further measures.



'In order to really protect privacy online we need legislation to go
after bad actors, self-regulation that would be global, and
technologies that put users in control,' Schwartz told E&P Online.
He said consumers should be able to obtain and modify the profiles
that online advertisers gather.



Others saw less to applaud. 'The Network Advertising Initiative (NAI)
Principles will not protect consumer privacy,' said the Electronic
Privacy Information Center, another Washington group. 'The Principles
perpetuate the secretive tracking of Internet users [and] place the
burden of privacy protection squarely on the consumers.' It said that
under the principles, consumers need to opt out before firms would
forebear from tracking their Internet use or linking their online
profiles to personally identifying information such as names and
street addresses.