Jules Polonetsky & Omer Tene, Advancing Transparency and Individual Control in the Use of Online Tracking Devices: A Response to Transatlantic Legal and Policy Developments
Comment by: Catherine Dwyer
Published version available here: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1920505
Workshop draft abstract:
For over a decade, behavioral advertising has been a focus of privacy debates on both sides of the Atlantic. Industry actors maintain that targeted ads are essential to supporting the main business model online whereby users benefit from free content and services in return for being subjected to various advertisements. They assert that they do not cause any harm to users given that any data collected and used are anonymous and in compliance with data protection standards. Regulators and consumer advocates insist that many advertising or analytics companies are collecting and using personal data in a manner that does not comply with the principles of privacy laws. They maintain that the dignity of users is impacted by these hidden practices and questions about harm due to the use of data for purposes adverse to users remain unanswered.
The recent publication of the much anticipated FTC Staff Report on reform of the legal framework for privacy protection of consumers and the Department of Commerce Green Paper on privacy and innovation in the Internet economy has raised the stakes for both proponents and opponents of behavioral advertising and challenged the market to find solutions that are both privacy protective and commercially feasible. Moreover, the FTC’s proposal to implement a “do-not-track” mechanism echoes voices on the other side of the Atlantic calling for application of the e-Privacy Directive’s consent requirements through a browser based opt out. Such similarities reinforce our conviction that user expectations, business requirements, and privacy regimes are converging all over the world.
Our paper will draw on literature discussing behavioral economics, privacy enhancing technologies and user-centric identity management to seek a solution to the behavioral advertising quandary. Such a solution must be acceptable by businesses, users and regulators on both sides of the Atlantic and be based on the premise that privacy regulation needs to adapt to the changing market and technological realities without dampening innovation or damaging the business model that makes the Internet thrive.
We will provide a taxonomy of the various mechanisms used by the online industry to track users (e.g., first and third party cookies; flash cookies; beacons; Stored Flash Objects; browser fingerprinting, deep packet inspection; and more); assess under legal, technical and business criteria the feasibility of existing and new proposals for compliance with the latest FTC and EU regulatory requirements; and explore various strategies for solutions such as browser defaults and add-ons, special marking of targeted ads, and short privacy policies.