Digital Discourse / Archives for FTC

SIPAlert Daily – FTC workshop to focus on native advertising

September 26, 2013 By

“It’s beginning to look a lot like…content.”

The “It’s” in this case is advertising—more specifically, native advertising or sponsored content. We’re seeing it more and more these days, ads that companies are running—sometimes even designing and writing for clients—that mirror the content around them. It’s proving very effective to the point that the Federal Trade Commission has decided to look into it. And SIPA and SIIA can play a part in this.

The FTC will host a workshop on Dec. 4 here in Washington, D.C., to examine the practice of blending advertisements with news, entertainment and other content in digital media. The workshop will unite publishing and ad industry representatives, consumer advocates, academics, and government regulators to explore changes in how paid messages are presented to consumers and consumers’ recognition and understanding of these messages.

According to the FTC, this fits snugly into their role of helping consumers identify advertisements as advertising wherever they appear. They have made recent updates to the Search Engine Advertising guidance, the Dot Com Disclosures guidance, and the Endorsements and Testimonials Guides, “as well as decades of law enforcement actions against infomercial producers and operators of fake news websites marketing products.”

As I said, SIIA wants to take a role in this, based on input from our members. If you have feelings or opinions about this, please let us know—for or against. (Here’s my email.) Here are some of the topics that the workshop may cover:

- “What is the origin and purpose of the wall between regular content and advertising, and what challenges do publishers face in maintaining that wall in digital media, including in the mobile environment?”

- “In what ways are paid messages integrated into, or presented as, regular content and in what contexts does this integration occur?” How has mobile affected this?”

- “What business models support and facilitate the monetization and display of native or integrated advertisements?” Who controls this?

- “How can ads effectively be differentiated from regular content, such as through the use of labels and visual cues?” Does social media blur these lines?

- “What does research show about how consumers notice and understand paid messages that are integrated into, or presented as, news, entertainment or regular content?”

A MediaBrix survey found that “the majority of online adults who have seen advertising that appears as content in the past 12 months find the ads misleading”—as high as 86%” (for sponsored video ads). Close to 50% of those polled find promoted tweets, one of Twitter’s revenue-producing methods, misleading.

FTC blogger Lesley Fair called this “the trendy topic du jour,” so it is probably a good time to take a look. The popular site BuzzFeed pretty much blurs the lines completely. And it seems to be working. (An article a few months ago said it was their sole revenue source.) They have “Featured Partners” on certain stories that look just like the rest of the stories. So “The 10 Greatest Comebacks in Entertainment History” is sponsored by The Michael J. Fox Show. It has 33 comments, none mentioning its ad status. And “12 Lengths That Robin Williams Has Gone to Make Us Laugh” is sponsored by his new show, The Crazy Ones. That one has 12 comments, all complimentary.

Those stories actually change each time you click on it. For the Michael J. Fox Show we get “10 Ways All Families Are Basically the Same” and “12 Things We Love About Michael J. Fox.” It’s an interesting strategy—multiple content pieces based on one sponsor. And here’s something funny. I found a Washington Post article about a Church of Scientology advertorial that appeared on the Atlantic Magazine website and went “a bit too far.” The article is broken up by what looks like a subhead to the story—“Get Your Business Online” is the one I saw—but it’s actually an ad. Now I’m confused.

And thus the workshop. Again please contact myself or David LeDuc, SIIA’s senior director of public policy, if you have something to add on this topic. Thanks so much.

To subscribe to the SIPAlert Daily, create or update your SIIA User profile and select “SIPA interest.”

Ronn LevineRonn Levine began his career as a reporter for The Washington Post and has won numerous writing and publications awards since. Most recently, he spent 12 years at the Newspaper Association of America covering a variety of topics before joining SIPA in 2009 as managing editor. Follow Ronn on Twitter at @SIPAOnline

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Filed Under: Content, SIPA, SIPAlert Daily Tagged With: , ,

Saving the Safe Harbor: Commissioner Julie Brill to the Rescue!

September 17, 2013 By

At the EU Data Protection and Privacy Conference today in Brussels, FTC Commissioner Julie Brill delivered a powerful speech about the way the U.S. protects consumer privacy. Along the way she offered a strong defense of the U.S. Safe Harbor Framework for European privacy:

“In the commercial space, the Safe Harbor Framework facilitates the FTC’s ability to protect the privacy of EU consumers. Without the Safe Harbor, my job to protect EU consumers’ privacy, where appropriate, would be much harder. In an era where we face many threats to privacy, Safe Harbor has been an effective solution, not the problem.”

In the face of so many challenges to the Safe Harbor Framework coming from European public officials, this speech from a prominent U.S. consumer protection official is a crucial reminder of the importance of this cross-border framework for international privacy protection.

Her remarks are also notable for the clear distinction she makes between government surveillance and commercial privacy:

“The issue of the proper scope of government surveillance is a conversation that should happen – and will happen – on both sides of the Atlantic. But it is a conversation that should proceed outside out of the commercial privacy context.”

As I’ve noted in previous blogs, the conflation of the two is damaging to both the need to protect citizens from intrusive government surveillance and in finding the right sort of fair information practices that provides for commercial enterprise, innovation and the preservation of consumer privacy.  Commissioner Brill is exactly right when she insists on keeping these issues separate.

Mark MacCarthy, Vice President, Public Policy at SIIA, directs SIIA’s public policy initiatives in the areas of intellectual property enforcement, information privacy, cybersecurity, cloud computing and the promotion of educational technology. Follow Mark on Twitter at @Mark_MacCarthy

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Filed Under: Policy, Policy - Privacy Tagged With: , ,

Is it Time for the FTC to Hit the Reset Button on Privacy?

March 6, 2013 By

Several years ago, my spouse was the victim of ID theft.  It was a frightening, invasive, time-consuming process to get to the bottom of what happened, and to fix it.  She is far from the only one, however, to be victimized by identity theft.

In 2012, the Federal Trade Commission received 369,132 complaints about identity theft – or 18% of all consumer complaints reported to the FTC.  This marked the thirteenth year in a row that identity theft topped the list of consumer complaints to the FTC.

Lately, the FTC has been heavily focused on issues such as “comprehensive online data collection.” And while the issues raised by data collection practices merit attention, the persistent scourge that is identity theft is receiving far less focus than it deserves.  So this begs the question, as the FTC welcomes a new Chairwoman in Edith Ramirez and establishes a new agenda for 2013:  Is it time for the FTC to hit the reset button?

The FTC has a real opportunity to refocus on what is undoubtedly a difficult issue – identity theft – a very real problem that creates a significant risk of fraud and monetary harm.  They could do this by analyzing the most pressing privacy issues facing consumers — the current online threats and vulnerabilities, the security protocols that can reduce the likelihood of identity theft, and ways that consumers can be empowered to protect themselves from identity thieves.

Yes, it is time for the FTC to hit the reset button, and focus on one of the greatest threats facing consumers today:  Identity theft.

David LeDuc is Senior Director, Public Policy at SIIA. He focuses on e-commerce, privacy, cyber security, cloud computing, open standards, e-government and information policy. Follow the SIIA public policy team on Twitter at @SIIAPubPolicy.

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FTC: Don’t Confuse Mobile with Personal

February 1, 2013 By

SIIA is supportive of the FTC’s effort to provide guidance for the multistakeholder approach to mobile privacy protection being led by the NTIA.

Today’s mobile guidance report from the FTC provides some useful input to that end. However, SIIA continues to strongly disagree with some of the high-level conclusions reached by the Commission. Particularly, SIIA strongly disagrees with the FTC’s conclusion that “[m]ore than other types of technology, mobile devices are typically personal to an individual, almost always on, and with the user.”

While this may be true when applied to smartphones and the model for their use today, SIIA strongly believes that this vision misses the mark for tablets, and it most certainly inaccurately portrays the evolving nature of Internet-based technology and new-age devices. On the contrary, SIIA is confident that the larger trend in technology with products and services offered seamlessly across a wide range of platforms and devices, coupled with the increasing saturation of Internet-powered devices reflects the shift to an environment where devices are less “personal” and less linked to a particular individual than personal computers.

For instance, just several years after the introduction of the tablet computer, and less than a decade after the introduction of the the modern smartphone, it is not uncommon for a household to have a wide range of internet-connected devices, with perhaps the majority of those devices being mobile devices shared by numerous users.

SIIA believes that the FTC’s fundamental misunderstanding about the increasing personalization of devices sets an inappropriate basis on which to build a foundation of privacy practices, either voluntary or mandatory. In order to develop an effective privacy framework for rapidly evolving technology, it is critical that we fully understand how this evolution is taking place, and all the opportunities that this innovation brings.

David LeDuc is Senior Director, Public Policy at SIIA. He focuses on e-commerce, privacy, cyber security, cloud computing, open standards, e-government and information policy. Follow the SIIA public policy team on Twitter at @SIIAPubPolicy.

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Filed Under: Policy, Policy - Privacy Tagged With: , ,

Mobile Payments Get Currency

April 25, 2012 By

The FTC is looking at mobile payments this Thursday, an event that caps several weeks of intense attention to this innovative new technology by policymakers. In March the House Financial Services Committee and the Senate Banking Committee held hearings. And the Internet Caucus held a Congressional briefing, which I chaired.

Several years ago a study by ITIF highlighted mobile payment’s opportunities for efficiencies, growth and innovation. It wondered why it hadn’t taken off in the US, the way it had in other jurisdictions such as Japan and Korea. Since then Square, Intuit, Google, ISIS, PayPal have all ramped up their efforts to bring the new service to consumers and retailers in an attractive easy to use package. The majority of Americans will be embracing mobile payments by 2020, a Pew Internet study found last week.

The benefits are enormous. Mobile payment technology means faster checkout, more through put for merchants, the opportunity to send and receive offers and promotions, greater security, and a platform for new innovative services that haven’t been created yet.

It is worth pausing on the benefits of increased security. Unlike traditional magnetic stripe payment card transactions, mobile payments use a different security code for each transaction. Even if the transaction data is compromised, it cannot be used to make a counterfeit card that would work at the point of sale. This takes the merchant system out of harm’s way and reduces risk to cardholders. Mobile payments implemented on a smartphone can also be protected by a password or PIN number, adding barriers to illicit use of a lost or stolen phone. If asked to choose based on security, shoppers would be smart to use mobile payments over traditional cards.

Some have suggested that mobile payments create increased privacy risks because new information would be available to new players. But these risks are speculative and are being addressed in advance by market players who design their systems to be privacy-protective. They know that the market will only work on the basis of trust, careful handling of personal information, and a compelling user experience.

Mobile payment providers collect location information from their users, but only with affirmative consent. Product specific information isn’t collected at all and so cannot be added to a consumer profile to target ads. Cell phone and email information are available to mobile payment service providers at the time of sign up, but are not transferred to third parties such as retailers. Mobile payment services are savvy enough to avoid the mistake of allowing secret, undesirable acquisition of contact information by third parties. Under the Google Wallet rules, for example, contact information could not be disclosed to a retailer for marketing or advertising purposes without affirmative consent.

The privacy default for mobile payments is that consent is needed for any sharing of consumers’ personal information for marketing purposes. Industry participants have set up their systems with this requirement for consent as the default. This privacy-by-default approach renders concerns about privacy violations more theoretical than real. Mobile payment users can feel confident that they can enjoy the conveniences and added security and usefulness of mobile payments without worrying about privacy violations.

Mark MacCarthy, Vice President, Public Policy at SIIA, directs SIIA’s public policy initiatives in the areas of intellectual property enforcement, information privacy, cybersecurity, cloud computing and the promotion of educational technology.

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Filed Under: All About Mobile, Government, Mobility, Policy, Policy - Cybersecurity, Policy - Privacy, Software, Software Events Tagged With: , , ,

SIIA Welcomes New FTC Privacy Report

March 26, 2012 By

SIIA welcomes today’s clarification of the FTC’s policies in the area of online privacy. This clarification is especially important because of the FTC’s substantial authority to bring cases against the companies it claims are in violation of its policies. SIIA has long supported a collaborative, public-private approach as the best way to ensure consumer privacy, and we cannot endorse the report’s call for new legislation. In light of the FTC’s substantial authority in this area, we do not believe there is a need for new privacy legislation.

Read today’s coverage of SIIA’s stance:

FTC Report Calls for Transparency, Stops Short on Do Not Track Law – E-Commerce Times

FTC privacy: Key excerpts from the report – Washington Post

FTC Pushes ‘Do Not Track’ Privacy Option for Consumers – National Journal

FTC Chairman: Do-Not-Track Law May Not Be Needed – PC World

Mark MacCarthy, Vice President, Public Policy at SIIA, directs SIIA’s public policy initiatives in the areas of intellectual property enforcement, information privacy, cybersecurity, cloud computing and the promotion of educational technology.

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Filed Under: Policy, Policy - Privacy Tagged With: ,

SIIA comments on FTC Privacy Report

February 18, 2011 By

Today, SIIA submitted comments on the Preliminary FTC Staff Report on Protecting Consumer Privacy in an Era of Rapid Change: A Proposed Framework for Businesses and Policymakers. Here’s an excerpt:

SIIA strongly supports the balance between privacy and the free flow of information, as well as the balance between the need for consumer confidence and continued innovation.

To that end, we appreciate the FTC, the DOC and the Administration for taking such a thorough, thoughtful approach, rather than rushing to make policy recommendations at this time.

In an era of rapidly changing technology and business models, the development of a fixed regulatory framework for privacy protection is a counterproductive exercise.

Therefore, SIIA strongly cautions against the implementation of unnecessary legislation or regulations, in favor of a framework that is industry-led, voluntary and enforceable.

The FTC’s proposed privacy framework calls for companies that collect or use consumer data to adopt certain privacy protections to ensure that consumers and other data subjects are protected from privacy-related harm.

The Report combines elements of the previous policy frameworks used by the Commission – the notice and consent and the harm frameworks – to craft a checklist of good information management practices that companies can use as they design the systems and business practices or update them to provide new products or services to their customers.

The key elements of this new privacy framework include:

  • Data security, reasonable collection limitations, sound retention policies and data accuracy;
  • Choice on the collection and use of data at the time of data collection, except for certain commonly accepted business practices;
  • Clearer, shorter and more standardized privacy notices;
  • Special choice for online behavioral advertising:  Do Not Track; and
  • Reasonable access to data.
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