Consumer Groups Call for Online Ad Probe

The U.S. Public Interest Research Group (USPIRG) and the Center for Digital Democracy have filed a complaint with the Federal Communications Commission calling for a formal investigation into the online advertising industry. According to the complaint (PDF), tracking, data profiling, and ad targeting techniques used by online advertisers present a real and growing threat to the privacy of everyday Internet users.

“Unfortunately, over the last several years the FTC has largely ignored the critical developments of the electronic marketplace that have placed the privacy of every American at risk,” declared Jeff Chester, CDD executive director. “The FTC should long ago have sounded a very public alarm—and called for action—concerning the data collection practices stemming from such fields as Web analytics, online advertising networks, behavioral targeting, and rich ‘virtual reality’ media, all of which threaten the privacy of the U.S. public.”

The complaint contends that the privacy policies of major online advertisers and Internet sites—like Yahoo, Google, AOL, and Microsoft—are inadequate and fail to fully inform users how data about their sessions and use of a site might be used. While a site may not collect “personally identifiable information” about a user, they will be able to track a user’s paths through a site (or network of sites), analyze their search terms, note how often they connect to a site and from what locations. In many cases, sites may be able to determine several key lifestyle characteristics of its uers, including potentially sensitive information like health status, employment, and financial information, through aggregating and analyzing data often deemed innocuous. Consumers have no way to view this information, correct it, demand that it be removed from company’s records, or control how the information is used.

“The emergence of this on-line tracking and profiling system has snuck up on both consumers and policymakers and is much more than a privacy issue,” said U.S. PIRG Consumer Program Director Ed Mierzwinski. “Its effect has been to put enormous amounts of consumer information into the hands of sellers, leaving buyer-consumers at risk of unfair pricing schemes and with fewer choices than the Internet is touted to provide.”

As a first step, the groups want the FCC to look at Microsoft’s new adCenter services, which uses data obtained from Hotmail accounts to target advertising; based on the investigation, the groups want the FCC to issue injunctions, if necessary, and craft policies and possible legislation which would prevent abuse of consumers’ privacy.