Obama About to Face Tests on Consumer Privacy
Tuesday, January 13, 2009
President-elect Barack Obama is about to face his first tests on consumer privacy, with questions about how much personal information Internet companies should be able to collect about consumers, how long they should keep that data, and whether they should use it to serve ads to Web surfers.
The Future of Privacy Forum, a Washington group supported by AT&T, is pushing the transition team to appoint a chief privacy officer to shape standards about the use of consumer data. Separately, the Center for Digital Democracy and the U.S. Public Interest Research Group said they plan to file a complaint today with the Federal Trade Commission, urging the agency to investigate mobile marketing practices that may threaten consumer privacy.
Privacy advocates have long been asking federal regulators to create standards for how personal information can be captured by search engines, social networks and mobile browsers. Internet companies say they should police themselves when it comes to protecting consumer privacy. But as marketers increasingly tailor ads based on consumers' interests, background and whereabouts, Obama is being called upon to develop a framework for the technologies.
"With this administration, how data is handled is going to be far more central than ever before," said Jules Polonetsky, co-chair of the Future of Privacy Forum and a former chief privacy officer at AOL. "We have people enthusiastically interacting with the government -- wanting Barack to be our Facebook friend -- yet we don't have an accountable figure to help shape information policy."
The Future of Privacy Forum, launched in November, receives funding from AT&T. The group's co-chair, Christopher Wolf, is a privacy lawyer at the firm Proskauer Rose, which has ties to the telecommunications company. Privacy officers from Facebook, IBM, Intel, Loopt and Microsoft are on the group's advisory board, as well as academic privacy experts. Google, Yahoo and Verizon are not members.
Polonetsky said most companies that collect consumers data online have privacy officers, and many countries, such as Canada and Argentina, as well as the European Union, have data protection commissioners. The United States, he said, does not play a role in shaping international data standards "because we don't have someone in charge."
Obama said he will create a high-level chief technology officer to improve government's communication with citizens and access to federal data. It remains unclear what the job will entail.
Since the election, a number of organizations have urged Obama to create tech-related positions. The Family Online Safety Institute, for example, is asking for a chief safety officer, and a cybersecurity commission has called for a chief cybersecurity officer within the White House.
In an unrelated push for stricter standards regarding the data of cellphone users, the Center for Digital Democracy and U.S. PIRG are asking the FTC to examine the practices of companies such as Bango, which analyzes mobile audiences, and AdMob, a mobile advertising network, for using "unfair marketing tactics" that do not adequately inform consumers about how personal information is used.
Jeff Chester, executive director of the Center for Digital Democracy, said mobile customers are particularly vulnerable to ads for new loans, refinancing deals or new credit cards in the uncertain economy. Most devices can track a user's location, which advertisers can leverage for marketing purposes.
"The FTC has failed to address the consequences," he said. "Will consumers understand that targeted ads are coming at them from every which way?"
Chester said laws and clear regulations are needed more than a privacy chief.
"We don't need someone at the White House urging the industry to behave better . . . to help the industry dodge the regulatory bullet," he said. "Obama has called for a new era of regulatory scrutiny. Does that include online advertising and data collection?"