Online Profiling and Consumer Choice Peter P. Swire Center for American Progress Ohio State University ATL Hill Briefing April 28, 2008

Overview My background My background Background on behavioral profiling Background on behavioral profiling Self-regulatory efforts to give consumer choice – NAI Self-regulatory efforts to give consumer choice – NAI Some technical obstacles to self regulation Some technical obstacles to self regulation Proposal to fix Proposal to fix

My Background Today: Today: Law professor, Ohio State (live in DC) Law professor, Ohio State (live in DC) Senior Fellow, Center for American Progress Senior Fellow, Center for American Progress Was Chief Counselor for Privacy in OMB under President Clinton Was Chief Counselor for Privacy in OMB under President Clinton Full range of privacy issues Full range of privacy issues Also teach/write on cyberlaw, consumer protection, antitrust, cybersecurity Also teach/write on cyberlaw, consumer protection, antitrust, cybersecurity

Background on Behavioral Advertising Internet bubble of late 90s Internet bubble of late 90s Internet advertising Internet advertising Cookies that let a web site identify the same computer when it returned Cookies that let a web site identify the same computer when it returned OMB cookie guidance in 2000 OMB cookie guidance in 2000 DoubleClick used cookies for an advertising network DoubleClick used cookies for an advertising network Agreed to have consumer choice, 2001 Agreed to have consumer choice, 2001 Opt out of being tracked & of targeted ads Opt out of being tracked & of targeted ads Browser settings also stopped some cookies Browser settings also stopped some cookies

2d Wave of Internet Ads Lull from 2001 until about 2006 Lull from 2001 until about 2006 Big recent increase in online advertising Big recent increase in online advertising Recent mergers Recent mergers Google/DoubleClick Google/DoubleClick Microsoft, AOL, and Yahoo have also made acquisitions in this space Microsoft, AOL, and Yahoo have also made acquisitions in this space This year, Internet advertising will be larger than radio advertising This year, Internet advertising will be larger than radio advertising

FTC and Self-Regulation 2006 hearings on the next Tech-Ade 2006 hearings on the next Tech-Ade 2007 town hall on behavioral advertising 2007 town hall on behavioral advertising Proposed FTC self-regulatory privacy principles for online behavioral advertising Proposed FTC self-regulatory privacy principles for online behavioral advertising Public comments submitted in April Public comments submitted in April Network Advertising Initiative since 2001 offers consumer choice through opt out cookie Network Advertising Initiative since 2001 offers consumer choice through opt out cookie Consumer gets a cookie that says dont serve different ads to me based on where I have surfed Consumer gets a cookie that says dont serve different ads to me based on where I have surfed

But, Technical Problems Swire & Anton comments to FTC in April on technical issues in behavioral advertising Swire & Anton comments to FTC in April on technical issues in behavioral advertising FTC Consumer Control Principle – consumer choice FTC Consumer Control Principle – consumer choice New consumer poll on how important to be able to choose to opt out: New consumer poll on how important to be able to choose to opt out: 63% rate 10 out of 10 63% rate 10 out of 10 84% say 8 or higher 84% say 8 or higher Industry (NAI) says need consumer choice Industry (NAI) says need consumer choice But, the tool for choice is the opt-out cookie, and its broken But, the tool for choice is the opt-out cookie, and its broken

Not a Good Thing for Choice Monday I opt out of tracking, using an opt- out cookie Monday I opt out of tracking, using an opt- out cookie Tuesday anti-spyware software deletes all cookies Tuesday anti-spyware software deletes all cookies Wednesday I am being tracked again Wednesday I am being tracked again

Another Bad Thing for Choice Monday I opt out of tracking Monday I opt out of tracking Tuesday I delete all cookies Tuesday I delete all cookies Browser software now deletes the opt-out cookies Browser software now deletes the opt-out cookies Wednesday Im being tracked again Wednesday Im being tracked again

What to Do About It Our comments to FTC explain simple technical fixes for anti-spyware & browser software Our comments to FTC explain simple technical fixes for anti-spyware & browser software If dont do the technical fix, then industry & the FTC arent meeting their consumer choice goal If dont do the technical fix, then industry & the FTC arent meeting their consumer choice goal Congressional attention may speed a good architecture for consumer choice Congressional attention may speed a good architecture for consumer choice