FTC to examine targeted advertising

Forum set in response to complaints from privacy groups

WASHINGTON -- The Federal Trade Commission will host a two-day forum on targeted advertising in November, following a series of complaints by privacy groups.

The FTC town hall meeting is intended to serve as a way for the agency to learn more about current practices in targeted advertising, said Jessica Rich, assistant director for the FTC's division of privacy and identity protection. The agency wants to hear how Web advertising companies protect the personal data they collect, how they notify consumers about the data they collect and whether the data is sold or used by other companies, the FTC said.

"Is it secure where it is stored?" Rich said. "Are companies following any kinds of standards? These are questions we have, and a lot of observers have."

In November, the Center for Digital Democracy (CDD) and the U.S. Public Interest Research Group (PIRG) filed a complaint with the FTC against Microsoft Corp. and other Web-based advertising companies, accusing them of using "unfair and deceptive" business practices to collect data about their customers.

The state of New York, the Center for Democracy and Technology, and the Electronic Privacy Information Center have also asked the FTC to examine targeted advertising, Rich said.

The CDD and U.S. PIRG complaint accused Microsoft and other companies of violating customers' privacy rights. "Microsoft has embarked on a wide-ranging data collection and targeting scheme that is deceptive and unfair to millions of users," the groups said in their complaint.

Microsoft, in response, said it has a "clear, understandable" privacy policy and is committed to customer choice about privacy. A company spokeswoman wasn't immediately available for comment on the FTC forum.

Asked about bad practices currently being used, Rich didn't provide a specific example. But if an online advertising company didn't follow its own privacy policy, that's something the FTC could investigate, she said.

The FTC forum is scheduled for Nov. 1 and 2 in Washington. This will be the second FTC forum focused on targeted advertising, but new technologies have been developed since the last forum, in 2000, Rich said.

Copyright © 2007 IDG Communications, Inc.

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