Critic: FTC needs to take action on targeted ads

By , IDG News Service |  Business

The U.S. Federal Trade Commission needs to take action to protect consumers
against invasive targeted advertising practices, one critic said Thursday.

Targeted advertising vendors are tracking children and conducting racial profiling,
said Jeffrey Chester, executive director of the Center for Digital Democracy
(CDD), firing an opening salvo at an FTC e-behavioral advertising workshop
that runs through Friday.

Online advertisers are adopting an "ever-growing sophisticated array of
ploys to track our every move," Chester said. "Few members of the
public understand what's going on, that ... our mouse clicks are tabulated and
stored and sold to the highest bidder."

The CDD and the U.S. Public Interest Research Group (US PIRG) filed a complaint
on targeted advertising with the FTC a year ago, and on Thursday, the groups
filed a supplemental complaint.
The 65-page supplemental complaint details some companies' efforts to target
teenagers based on their interests, as well as consumers based on sexual orientation
and health concerns.

In many cases, notice about data-collection practices are buried, CDD and US
PIRG said.

The FTC should investigate online advertising practices, create a task force
to focus on targeted advertising aimed at children and also look into targeted
advertising on social-networking sites, the groups said.

The FTC has shown concern about these practices, Chester said. "But we
believe the time for fact-finding is over," he said. "The commission
... must now act to protect Americans from the unfair and deceptive practices
that have evolved."

Representatives of the online advertising industry defended their actions,
saying targeted advertising benefits consumers. Targeted ads help pay for customers
to "receive more and better free content and services," said Randall
Rothenberg, president and CEO of the Interactive Advertising Bureau, a trade
group for online advertisers.

Without targeted advertising, there'd be no free online services such as e-mail,
added Michael Walrath, senior vice president for Yahoo Inc.'s marketing products
division.

The online advertising industry takes several steps to protect customer data,
and the vast majority of large companies have privacy policies that they enforce,
even though many are not required to have policies, said Trevor Hughes, executive
director of the Network Advertising Initiative (NAI), a coalition of online
advertisers focused on educating consumers and creating standard practices.

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