After a decade of investigating online privacy issues, theFederal Trade Commission has proposed voluntary guidelines designedto give consumers more visibility into the behavioral advertisingprocess. In proposing this industry self-regulation, the FTC's fourprimary concerns and suggested remedies are, in summary:

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·Greater transparency and consumer control. Websites thatcollect data for behavioral advertising should provide a clear,prominent statement that the information is being collected toprovide ads targeted to the consumer and allow the consumer to optout.

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·The need to prevent criminals from accessing data collected forbehavioral advertising. Companies that collect and store consumerdata for behavioral advertising should provide reasonable securityand retain the information only as long as is necessary to fulfilla legitimate business or law enforcement need.

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·Assurances that companies keep their promises of privacy whenthey change their privacy policies. Companies should obtain consentfrom affected consumers before using data in a manner that isdifferent from the promises they made when they collected theinformation.

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·The collection of sensitive data, such as medical records, forbehavioral advertising. Companies should only collect sensitivedata for behavioral advertising if they obtain consent from theconsumer. Regarding this concern, the FTC also sought comment onwhat constitutes "sensitive data" and whether its use should beprohibited, rather than subjected to consumer choice.

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In spelling out its proposal in a statement, the FTC says itsstaff "was mindful of the need to maintain vigorous competition inonline advertising as well as the importance of accommodating thewide variety of business models that exist in this area." Theproposal acknowledges "that behavioral advertising providesbenefits to consumers in the form of free content and personalizedadvertising."

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Shop.org, the online division of the National Retail Federation,contends that the FTC's use of the term behavioral advertising istoo broadly defined and urges the FTC to "move slowly." Shop.orgagrees that the practice provides a variety of benefits but alsocontends that it "isn't harmful and isn't as widely opposed ascritics claim."

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"Retailers have long understood that keeping their customershappy is the most essential part of building positive, long-termbusiness relationships," says Scott Silverman, Shop.org's executivedirector, in a statement. "The FTC's proposed guidelines could havethe effect of undoing many online retail best practices andinnovations that customers inherently value."

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Silverman also contends that although the principles areintended to be self-regulatory, they "likely will be viewed by thebusiness community not as mere suggestions, but truly regulatory innature, with perceived violations being considered 'unfair anddeceptive' under the Fair Trade Commission Act."

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The organization urges the FTC to conduct a study outlining "anyconsumer harm from behavioral advertising and any specificdeficiencies in existing industry practices." It calls for a"complete record," and charges that the FTC report "seems to sweepin a wide array of privacy issues that go well beyond simply movingforward a discussion about self-regulation of online advertisingpractices."

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Shop.org acknowledges that critics portray consumers as opposingemail marketing. Yet it estimates that just 6% of retail consumersopted out of marketing emails in 2007. Consumers aren'tcomplaining, the critics say, because they are not aware of theextent of online data gathering.

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