Update on the FTC Roundtables and Congressional Action

Privacy 2010

WE KNOW THE INTERNET

The Past is Prologue

1999-2000

1999 2000 2001 2002 2004 2006 2007 2008 2009 2010

1999♦FTC Conference on Online Profiling♦OECD Consumer Protection Guidelines♦Network Advertising Initiative

2000♦FTC Report to Congress

A Call for Regulation

• Commends NAI but . . .

• [Recommends] legislation that would set forth a basic level of privacy protection for all visitors to consumer-oriented commercial Web sites with respect to profiling.

– Basic standards of practice governing the collection and use of information online for profiling, and provide an implementing agency with the authority to promulgate more detailed standards

– [Including] authority to grant safe harbors to self-regulatory principles which effectively implement the standards of fair information practices articulated in the legislation and subsequent rulemaking.

2001-2005

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

2001♦FTC Conference on Consumer Data♦NAI adopts opt-out cookie♦New Chairman Muris – legislation

“premature”

2002♦“Dewey the Turtle”

Behavioral Targeting

PAGE TWO

34!SEATTLE’S SOGGY

SODSCITY BREAKS RECORD FOR CONSECUTIVE RAINY DAYS

Seattle Beacon March 18, 2010

SEATTLE. Forget Spain, the rain falls mainly in Seattle as the Emerald City “enjoyed” its 34th consecutive day of rain breaking the 1953 record. Sonny Smith, President of the Visitors and Convention Bureau was quick to point out that even with the record, the city still gets far less total rain than cities such as Miami. In fact, Seattle is not even among the top 101 cities for total rainfall. So remember, it could be worse – you could be in Miami.

Got Sun?

We got plenty in Palm Springs

www.sunsunsun.com

PAGE TWO

34!SEATTLE’S SOGGY

SODSCITY BREAKS RECORD FOR CONSECUTIVE RAINY DAYS

Seattle Beacon March 18, 2010

SEATTLE. Forget Spain, the rain falls mainly in Seattle as the Emerald City “enjoyed” its 34th consecutive day of rain breaking the 1953 record. Sonny Smith, President of the Visitors and Convention Bureau was quick to point out that even with the record, the city still gets far less total rain than cities such as Miami. In fact, Seattle is not even among the top 101 cities for total rainfall. So remember, it could be worse – you could be in Miami.

12TH Annual Chainsaw Juggling

Convention

FRIDAY MARCH 19THKING COUNTY HOSPITAL & CONVENTION CENTER

2005 2008 2010 2012

05

1015202530354045

$0.2

$7.8

$17.0

$44.0

10.7 14.2 16.8

Pct of Display Ads US Ad Spending ($100MM)

By the Numbers

Increased Click-through rates670% to 1000% Increased Conversions400 to 900%

BUT . . . 66% of consumers do not want websites they visit “to show you ads that are tailored to your interests

Renewed Focus on BT

2006-2007

2006 2007 2007 2007 2007 2007 2007 2008 2009 2010

2006♦CDD Files FTC Complaint Attacking BT

2007♦Merger Mania♦ehavioral Advertising Workshop♦CDD “Do Not Track” Proposal♦FTC Proposes BT Self-Regulatory

Guidelines♦Facebook’s Beacon Program

2008

2008 2008 2008 2008 2008 2008 2008 2008 2008 2009

2008♦Industry Pushback on Self Regulatory

Principles♦NAI Updates Principles♦NebuAd and BT 2.0 Blow up on Capitol

Hill♦FTC Workshop on Mobile Marketplace

2009

JAN FEB MAR JUNE JULY SEPT NOV DEC DEC DEC

JAN-AUG 2009♦FTC Releases Revised BT Guidelines♦Leibowitz Repeated Warnings to

Industry♦House hearings, explore BT♦IAB, DMA, AAAA Release BT

Guidelines

FTC’s Revised Proposed Self-Regulatory Guidelines (2009)

Every website where data is collected for behavioral advertising should provide a clear, concise, consumer-friendly, and prominent statement that

data about consumers’ activities online is being collected at the site for use in providing advertising about products and services tailored to individual consumers’ interests, and

consumers can choose whether or not to have their information collected for such purpose.

Reasonable Security, and Limited Data Retention, for Consumer Data

Affirmative Express Consent for Material Changes to Existing Privacy

Affirmative Express Consent to (or Prohibition Against) Using Sensitive Data for Behavioral Advertising

2009

JAN FEB MAR JUNE JULY SEPT NOV DEC DEC DEC

SEPT - DEC 2009♦FTC Announces Roundtable♦Privacy Wars♦Facebook Revised Privacy Policy♦FTC Panel on Newspaper Industry♦FTC/OECD Conf. on 10th Anniv. Of

Guidelines♦First FTC Roundtable

Industry Self Regulatory Principles

Education Transparency Consumer Control Data Security Material Changes Sensitive Data Accountability

PrivacY WARS

Competition for Consumers

PrivacY warsCompetition for Public

Opinion

Round One

December 7th, 2009Washington, D.C.

FTC Chairman Leibowitz

• We're at another watershed moment in privacy, and the time is right for the commission ... to take a broader look at privacy . . . Our minds are open.

• We all agree that consumers don't read privacy policies, or EULAs for that matter. I've been a supporter of opt-in for quite some time.

I believe action has not been a high enough priority to date. [The] United States needs comprehensive privacy legislation. If we continue the piecemeal approach to privacy in this country, we merely push aside the underlying issues.

Industry attempts to provide notice and choice to consumers have been insufficient thus far.

We have strayed far from the Fair Information Practices that should serve as a baseline for any comprehensive privacy legislation.

FTC Commissioner Commissioner Jones-Harbour

Shift in Focus – Use not Collection

We are taking a look at a number of technologies and business practices—including social networks, cloud computing, mobile, data broker relationships, and behavioral advertising—and will assess both the benefits and risks of those practices.

Christopher OlsenAsst. Director - Division of Privacy and Identity Protection

2009

2009 2010 2010 2010 2010 2010 2010 2010 2010 2010

2010♦Edith Ramirez and Julie Brill Confirmed♦Google Buzz and Facebook

Investigations♦Netflix Settlement♦Second and Third Roundtable♦Waiting for Godot Stearns

Round Two

January 28, 2010UC Berkeley School of LawBerkeley, California

Vladek Warns of Enforcement Actions

Consumers don’t understand commercial information-collection practices (ex: data brokers, behavioral targeting).

Lengthy policies are not effective; and

FTC is preparing to launch enforcement actions against companies engaged in “practices that undermine the tools that consumers can use to opt out of behavioral advertising.” 

David VladekDirector, Bureau of Consumer Protection

Round Three

March 17, 2010Washington, D.C.

“Irresponsible Practices”Commissioner Jones-Harbour

Google’s Buzz and Facebook Privacy Policy change “irresponsible”.

Concerned that “technology companies are learning harmful lessons from each other’s attempts to push the privacy envelope. continue to launch products where their guiding privacy principle appears to be, “Throw it against the wall, see if it sticks – and if not, we can always pull it back.” Deeds speak louder than words, and this is turning into a dangerous game of “copycat” behavior. And unlike a lot of tech products, consumer privacy cannot be run in beta.”

Calls for FTC to adopt position of intolerance towards such behavior.

SSL security should be default standard in cloud computing.

What’s Next?

FTC not certain where it will go and plans to "sit back" and think about the detailed record before making public a set of detailed recommendations by June or July.

“I have a sense, and it’s still amorphous, that we might head toward opt-in.”

David Vladek Chairman Leibowitz

CONGRESS

???

New Commissioner Julie Brill

Senior Deputy Attorney General and Chief of Consumer Protection and Antitrust for the North Carolina Department of Justice

Co-chair of the National Association of Attorneys General Privacy Working Group and Fair Credit

Assistant Attorney General – Vermont

Congressional Limbo March 13, 2009: Privacy bill a top

priority May 6, 2009: Working on draft

privacy bill. October 1, 2009: “Privacy

legislation affecting the online advertising industry could be submitted by November . . . [a]ccording to statements made recently by Rep. Rick Boucher.

January 28, 2010: Boucher "very close" to finishing a discussion draft of the legislation.

Rep. Rick Boucher (D-Va)Chairman House Energy and Commerce Committee’sSubcommittee on Technology and the Internet.

THANK YOU!

WE KNOW THE INTERNET

Internet Law Center100 Wilshire Blvd., Suite 950Santa Monica, CA 90401www.internetlawcenter.net

Bennet Kelley(310) 452-0401bkelley@internetlawcenter.net

♦Consumer Data Ecosphere Slides♦About the Internet Law Center♦About Bennet Kelley

Appendix

Consumer Data Ecosphere

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About the Internet Law Center

Bennet is one of the nation’s leading Internet attorneys and founder of the Internet Law Center.  He is Co-Chair of the California Bar Cyberspace Committee and a frequent speaker on the latest developments in Internet law at conferences throughout North America.  Bennet also is a regular guest on Webmaster Radio’s “InBoxed”.

Bennet has played a leading role in shaping Internet law and policy having testified and lobbied on Internet issues in Washington and Sacramento, winning praise from a key Congressional committee for his contributions to federal spyware legislation.

In addition, the Internet Law Center’s bi-weekly newsletter, Cyber Report, was named one of the top 100 Internet law resources and recognized by the LA Press Club.

About Bennet Kelley