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No Fireworks at Today's Online Ads Hearing

Coming off last week’s July 4 recess, today the Senate held a hearing on the privacy implications of online advertising. Online ads, behavioral tracking, targeted ads – whatever you might call it – has been an explosive policy issue, but today’s hearing was mostly just sparklers, with only a few bottle rockets here and there.

The big players were there–Google, Microsoft, Facebook and NebuAd–minus the ISPs, which Dorgan called out as being absent (which is why there will be another online ads hearing just for the ISPs, sure to be full of loud M-80s).

Key concepts mentioned over and over: Self Regulation; the need for Baseline Privacy Law; Pseudo-Anonymous; Opt-in vs. Opt-out; Choice.

Key Principle #1 – Self Regulation

All the witnesses espoused the need for self regulation. I’ve never liked this term, as it sounds like more of a system of conscious personal health management than a public policy strategy. Alas, it’s the lingua franca of pro-market forces in Washington.

Google, not surprisingly, is a supporter of self-regulation when it comes to online advertisements (but see baseline privacy law below). Most surprisingly, Google took very little heat from the Committee. There weren’t any questions about why it took so long to have a privacy link on its website – which Google added only a few days ago. Was the hearing, hmm, hmm, a catalyst toward this sort of “self regulation”?

The FTC is pushing for “self-regulation” principles, which I describe more in a previous post

Key Principle #2 – The Need for a Baseline Privacy Law

Leslie Harris at CDT was the strongest proponent for a general privacy law to cover all industries in all situations, and then companies can be more stringent if they’d like. Microsoft, Google, and NebuAd all agreed. Only Wayne Crews at CEI challenged the notion that Congress could keep up with the marketplace and that any privacy law would always be behind the times and would harm innovation.

Key Principle #3 – Pseudo-Anonymous

Senator Vitter asked perhaps the most profound question of the hearing: “Can we have true anonymity?”  Robert Dykes, CEO of NebuAd, said yes, they encrypt all personally identifying information such that even the government couldn’t subpoena them for it. Leslie Harris said no, data is really only “pseudo-anonymous”. Wayne Crews said that if you want to be anonymous, then the Internet is the wrong network for you (drawing laughter).

NebuAd took much of the heat here, as the technology provider enabling ISPs to track user behavior for ad targeting.

Key Principle #4 – Opt-in vs. Opt-out

Whether consumers must voluntarily agree to be tracked online or take measures to opt-out is a fundamental issue with no common agreement.

Leslie Harris – strident in favor of government regulation of privacy in many of her remarks – gave a good answer here – whether affirmative express consent is needed depends on the situation.

NebuAd described “robust notice” and “informed choice” as the key for consumers.


Senator Dorgan, as Chairman of the Commerce, Science & Transportation Committee concluded by emphasizing that everybody understands that Internet ads are important for how companies can make money to stay in business and for consumers to keep receiving the kinds of free content they currently enjoy. But there are issues…the invisibility of data collection, security of data, and use of personal information – all potential targets for regulatory smoke bombs. Stay tuned.