Update: FTC Proposes New Safeguards for On-line Privacy

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 Yesterday the Federal Trade Commission proposed a broad framework for protecting consumer privacy both on the Web and off-line. The framework is meant to help guide policymakers in crafting legislation to prevent the tracking and wholesale collection and sale of consumer information that is practiced by large on-line companies like Google, Mozilla, and Microsoft. Yesterday I wrote about health information “data mining;” (see post below) the collection and sale specifically of web-user’s health data, including the conditions they suffer from, medications used and identification information like name, age, gender and even personal doctor. As the FTC notes in its proposal; “The more information that is known about a consumer, the more a company will pay to deliver a precisely-targeted advertisement to him."



The FTC noted that current privacy efforts by most on-line companies were inadequate. Some did not alert consumers to the fact that data was being collected in the first place, others provided lengthy and incomprehensible warnings that most Web users ignore and others did offer the chance for individuals to block collection of their personal data, but this action has to be repeated at the beginning of every transaction.

Instead, the FTC framework proposes a “Do Not Track” option that consumers can chose to activate on their browsers. Similar to a “Do Not Call” list that prevents most (but not all) telemarketers from contacting you by phone, the “Do Not Track” option would prevent most data miners from surreptitiously collecting personal information on-line. The FTC says that the Do Not Call registry currently contains 200 million telephone numbers.

The framework is open to comment until January 31, 2011, and the FTC plans on issuing a final report later that year.

All of these recommendations directly apply to the particularly sensitive area of on-line health information. As an example of the problem, at a FTC roundtable meeting earlier this year, a panelist and commenter “cited a Wall Street Journal article indicating that some data brokers maintain lists of elderly patients who suffer from Alzheimer’s disease and similar maladies as ‘perfect prospects for holistic remedies, financial services, subscriptions and insurance.’” (The implication being that these folks would be perfect marks for buying costly, but useless, products.) One could imagine cancer sufferers being bombarded with similar product pitches, as well as “education” information that is sponsored by drug companies pushing their latest treatment.

It is a positive development that the FTC is acknowledging the gravity of the problem with on-line data mining and is devising protections to help consumers keep their health-related (and purchasing, web-browsing, etc.) information private. A “Do Not Track” option is a good start—one that is likely to be opposed by industry if it applies to a broad range of consumer information—and in the coming months Congress will need to develop legislation that leads to better protection of sensitive information. It’s a start; a much-needed action to address the growing threat to our personal privacy.

8 thoughts on “Update: FTC Proposes New Safeguards for On-line Privacy”

  1. This is a very tricky subject. For instance, I’m o.k. when on Amazon that they make suggestions. However when I’m on a new website and they tailor ads to me, well it’s just creepy. Short term suggest everyone install TACO 3.0 plugin into their Firefox browser. It defeats the majority of the tracking sites. Your site is tracking your readers right now with:
    Google Analytics
    SiteMeter
    Quantcast
    Comscore Beacon
    Media6 Degrees
    Lotame
    Naomi, are you willing to let me opt out of your tracking software you have intsalled?
    …Bruce…

  2. You are right, our blog does have tracking software, although it doesn’t give complete identifying information. Some visitors obviously have some blocking software that prevents information from coming into TypePad’s tracking system because many of fields are labeled “Unknown.” Basically I can use sitemeter to see how many people have come to the site, and in some cases what page they entered and left on and what server they use to surf the web (but not their name or other account info), what city/town and state they are located in and how long they spent on our site. This is useful only in that it helps us see which posts are most popular with readers and also gives us raw info about how many folks are visiting our site. I would classify this kind of data gathering as “benign” since we aren’t marketing anything, aren’t storing the info and basically just use it to help ourselves feel better that someone actually is reading what we wrote. Period. If you would like to opt out, please feel free to do so, I just have no idea how that is done!
    Naomi

  3. I’ve made my point. This is a tricky subject. By using Google Analytics you may be helping Google gather enough information to target people they shouldn’t even though you would never do that yourself. It will be fun to see what the FTC does.

  4. @ Bruce, the method of Amazon suggestions and random suggestions is the same. All Google products, web browsers, and most email providers are data mining tools. The future of advertising is based on this. Certain cable and satellite providers are working on the same technology only for TV ads instead of browsing. I find it hard to believe that a cookie or other tracker would know your medical history unless it is actually inputted by the user somewhere. Never-the-less, if you are using a site, you should expect that info to be sold to the highest bidder. The major credit bureaus make most of their money from data-mining. We don’t hear complaints about that though.

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