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Senators Grill Regulators, Advertisers On Net Profiling

While federal regulators and Internet advertisers continue to make progress toward developing a self-regulatory regime to govern how companies collect and use personal information online, Congress still needs to erect a baseline legal framework to protect the privacy of US Internet users, FTC commissioner Jodie Bernstein told the powerful Senate Commerce Committee today.

Using existing technology, Internet advertisers "have the capability to put together a really very complete profile of a person," said Bernstein, who heads the FTC's Bureau of Consumer Protection. "The most serious concern is that that (the data collection activity) is largely invisible to consumers."

Bernstein and other witnesses today testified about the controversial practice of online "profiling," wherein Web advertisers track the online movements of individual Internet users. By depositing files called "cookies" on the hard drives of Internet surfers, advertisers can track the sites that those users visit and deliver individually tailored banner advertisements to their browsers.

While advertisers insist that they do not link the information they collect about Web surfing activities with "personally identifiable" data, consumer outrage about profiling has helped fuel a groundswell of support for congressional action on Internet privacy.

"We all want to see these self-regulatory initiatives succeed, but people who aren't signatories to self-regulatory agreements" will be free to violate Internet users' personal privacy if Congress does not act, Sen. Ron Wyden, D- Ore., said following Bernstein's testimony.

Wyden and several other Commerce Committee members support bipartisan privacy legislation that would force advertisers to ask permission from consumers before collecting and using certain kinds of information.

Meanwhile, the FTC has, for several months, been negotiating with a high profile cadre of Internet advertising firms who together account for an estimated 90 percent of the online advertising industry.

Those advertisers earlier this year unveiled the Network Advertising Initiative, an industry-sponsored privacy program that would allow individual Internet users to "opt-out" of certain kinds of data collection activities.

The major bone of contention between Internet advertisers and privacy advocates seems to be the question of whether consumers should have to grant permission for their data to be collected (otherwise known as the "opt-in" approach) or simply be given the option of asking that it not be used (referred to commonly as "opt out").

Testifying today on behalf of the Internet advertising community, DoubleClick Chief Privacy Officer Jules Polonetsky reaffirmed his company's stance that it does not attach any human identity to the data it collects. "It is DoubleClick's policy not to uses sensitive information for profiling," Polonetsky said.

One of the largest and highest-profile Internet advertisers, DoubleClick has served as a lightening rod for criticism about the invasion of personal privacy associated with Internet advertising.

But despite the controversy, Polonetsky contended today that DoubleClick and companies like it are the reason that so much of the content provided over the Internet is offered free of charge.

Profiling is a valuable tool for advertisers to get the right information to the right consumers, he contended.


By David McGuire, June 13, 2000, Newsbytes

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