Consumer Advocate Warns Congress of the Dangers of Invasive Online and Mobile Marketing Practices

House Joint Subcommittee Hearing Examines Threats Posed by Tracking, Profiling and Targeting of Consumers

For Immediate Release: June 18, 2009
Contact: Jeff Chester (202-494-7100) Center for Digital Democracy (www.democraticmedia.org)

Washington, DC: Jeffrey Chester, executive director of the Center for Digital Democracy (CDD), urged Congress today to pass legislation that would ensure meaningful consumer protection online, especially for privacy. As more consumers increasingly rely on the Internet to obtain such sensitive services as financial products or health information, he explained, it is especially critical that the public be assured they will be treated fairly when engaged in online commerce.

Chester pointed to the failure of the regulatory system that should have protected Americans from irresponsible business practices that led to the current financial crisis. “As with our financial system, privacy and consumer protection regulators have failed to keep abreast of developments in the area they are supposed to oversee,” he explained. “In order to ensure adequate trust in online marketing—an important and growing sector of our economy—Congress must enact sensible policies to protect consumers.”

“Whether using a search engine, watching an online video, creating content on a social network, receiving an email, or playing an interactive video game, we are being digitally shadowed online,” Chester told a joint hearing by the House Subcommittee on Commerce, Trade, and Consumer Protection, and the Subcommittee on Communications, Technology, and the Internet. “Our travels through the digital media are being monitored, and digital dossiers on us are being created—and even bought and sold.” Singling out behavioral and “predictive” targeting for their violations of user privacy, Chester noted that the “consumer profiling and targeted advertising take place largely without our knowledge or consent, and affects such sensitive areas as financial transactions and health-related inquiries. Children and youth, among the most active users of the Internet and mobile devices, are especially at risk in this new media-marketing ecosystem.”

Chester’s CDD, in collaboration with the U.S. Public Interest Research Group (USPIRG), was instrumental in bringing the online privacy issue to the forefront in a series of petitions filed with the Federal Trade Commission in 2006 and 2007. Earlier this year, the two groups called on the agency to “conduct a special investigation into mobile marketing privacy threats and inappropriate practices targeting children, adolescents, and multicultural consumers.”

In his formal testimony today, Chester called on Congress to enact meaningful regulations to protect consumer privacy in the online and mobile arenas, effectively bringing the FTC’s Fair Information Practice Principles fully into the digital age.

“Americans shouldn’t have to trade away their privacy and accept online profiling and tracking as the price they must pay in order to access the Internet and other digital media,” Chester declared, adding that far from being an impediment to continued growth in the online sector, meaningful privacy safeguards will actually stimulate the digital economy. “The uncertainty over the loss of privacy and other consumer harms will continue to undermine confidence in the online advertising business,” he explained. “That’s why the online ad industry will actually greatly benefit from privacy regulation. Given a new regulatory regime protecting privacy, industry leaders and entrepreneurs will develop new forms of marketing services where data collection and profiling are done in an above-board, consumer-friendly fashion.”

A copy of the Chester’s testimony can be found at

http://www.democraticmedia.org/doc/cdd-testimony-20090618

The three CDD/USPIRG FTC complaints on online and mobile privacy are available at

http://www.democraticmedia.org/sites/default/files/FTCadprivacy.pdf,
http://www.democraticmedia.org/sites/default/files/FTCsupplemental_statement1107.pdf,
http://www.democraticmedia.org/current_projects/privacy/analysis/mobile_marketing

The Center for Digital Democracy (www.democraticmedia.org) is a Washington-based nonprofit organization dedicated to maintaining the diversity and openness of the media, focusing especially on the new broadband communications systems. CDD's executive director played a leading role in the passage of the federal Children's Online Privacy Protection Act of 1998.

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