August 9, 2000
Senate Commerce Committee
United States Senate
Washington, D.C. 20510
We write on behalf of millions of American consumers and users of the Internet to urge you to examine the recent agreement between the Federal Trade Commission (FTC) and the Network Advertising Initiative (NAI), a group of online profiling companies.1
First, the intrusive actions of online profilers affect millions of consumers, often without their control or knowledge. DoubleClick, the largest online advertiser, has profiled roughly one hundred million people with an undisclosed number linked to personal data.2 Engage has stated that it has seventy million profiles of its own.3 Another online advertiser, 24/7 Media, has sixty million anonymous profiles and an additional twenty million linked to personal data.4 It is likely that few of these individuals realize they have been actively profiled across the Internet.
Second, the NAI Principles recently endorsed by the Federal Trade Commission fail to provide an adequate level of privacy protection. The Principles will allow online profilers to combine previously declared anonymous data with personally identifiable data, like home addresses and telephone numbers. In the future, online profilers will be allowed to link information about online behavior with personally identifiable data on a burdensome opt-out basis. The persons profiled by these companies will have no guaranteed level of access to view what data has been collected on them. Personally identified profiles may also be distributed to any third party - for completely unrelated purposes - on an opt-out basis. All of these provisions, and others, will erode consumer control over the collection and use of highly detailed profiles.
Third, the public supports laws protecting privacy as opposed to industry creating its own standards. In a survey conducted by Business Week/Harris in early March, the respondents overwhelmingly preferred government action to letting industry groups set their own standards. The poll found that fifty-seven percent of those polled supported government passing laws protecting privacy online compared to only fifteen percent that preferred voluntary industry standards.5
Fourth, consumer and privacy groups should be provided a more active and involved role in developing guidelines that will govern Internet advertisers and online companies. The FTC's negotiations with the NAI continued for months without involvement from the public or consumer and privacy groups. As stated in a June 21 letter sent from several Senators on the Commerce Committee to FTC Chairman Robert Pitofsky, "self regulation negotiations that exclude consumers from the bargaining table represent an inadequate attempt at developing the appropriate policy regarding privacy protection."6 Had consumer and privacy groups been given the opportunity to play a more significant and earlier role in the negotiations, it is possible that the NAI Principles would have offered better protections for consumers.
Additional information about the online profiling industry and a more detailed analysis of the shortcomings of the NAI self-regulatory principles are available in a recent report authored by EPIC and Junkbusters, "Network Advertising Initiative: Principles not Privacy."7
In recent months, the Senate Commerce Committee has taken a leadership role in addressing Internet privacy and we hope that its members will continue to closely consider the future of online consumer protection.
1. See http://www.ftc.gov/opa/2000/07/onlineprofiling.htm
2. "Stakes are raised by net advertising", Financial Times, October 4, 1999.
3. "Engage - Profiling Philosophy", http://www.engage.com/privacy/profiling.htm
4. "FTC Privacy Plan: What Does It Ad Up To?", Inter@ctive Week, July 28, 2000, http://www.zdnet.com/intweek/stories/news/0,4164,2609360,00.html
5. Business Week/Harris Poll: A Growing Threat, March 20, 2000, http://www.businessweek.com/2000/00_12/b3673010.htm
6. Scanned image available at http://www.epic.org/privacy/internet/pitofsky_letter_0600.jpeg
7. Available at http://www.epic.org/privacy/internet/NAI_analysis.html