On Wednesday, DMA Vice President of State Affairs Chris Oswald and I attended the Digital Advertising Alliance’s (DAA) second Annual Summit, which previewed both the DAA mobile choice application, as well as the DAA mobile-optimized choice page. The theme of this year’s Summit was Protecting Innovation and Consumer Value Through Transparency and Control, including: the discussion of implementing effective consumer transparency and control in the multi-screen environment, building understanding of the economic value of relevant advertising to the ad-supported Internet, and self-regulation as a key foundation of continued innovation in the digital economy.
The keynote address was given by the Federal Trade Commission (FTC)’s Director of the Consumer Protection Bureau Jessica Rich. Rich commented on the topics of the Commission’s privacy priorities, industry self-regulation, and “do not track.” She opened her speech by praising DAA for being an industry leader in tackling issues with creative solutions. She also recognized the vital role self-regulation plays in the marketplace, stating it is well equipped to address “problems” arising in technology markets.
Rich identified three privacy priorities for the FTC: 1) big data, 2) mobile and interconnected devices, and 3) safeguarding “sensitive data.” She said the FTC loosely defines the term “big data” as the “collection of large amounts of data invisibly from consumers.” She said the FTC’s concern with “big data” is the unlimited collection of data without the knowledge or permission of consumers, the potential risks from data breaches, and the use of data to make incorrect inferences about consumers. She noted that data segments could be used to target certain groups such as the elderly, immigrants, and the economically disadvantaged, or to deny consumers the ability to complete a transaction. She said the FTC has recommended that Congress pass legislation to require data brokers to provide better transparency and choice to consumers.
Rich also noted the “always with you, always on” nature of mobile raises new consumer protection concerns. These include the collection and use of location data, interconnected devices, and how to provide transparency in a small or no screen environment. Finally, Rich said the FTC considers sensitive data to include children’s data, precise location data, health information, and financial data. She commented that the FTC takes the position that precise geo-location data is sensitive and requires opt-in consent for collection. She also commented that the FTC supports a federal data security and breach notification law.
Rich then went on to talk about self-regulation as an “incredibly important component” of consumer protection and the work done by the FTC. In her view, self-regulation can raise the standards for industry, and can lead to broader compliance and enforcement in the market. She praised self-regulation for being flexible and adaptive to market environments, addressing behavior before conduct becomes a violation of law, shaping public debate, and sending a positive message to key stakeholders like Congress and regulators. She noted that self-regulation does have drawbacks, but more importantly, she commented on the hallmarks of effective self-regulation.
Rich gave the DAA serious credit for creating and maintaining strong enforcement mechanisms, which give the FTC confidence in the program. She also praised other positive features of the DAA, including broad program participation, the DAA opt-out, simplified choice via the DAA Icon, and now AppChoices for mobile control. She commended the DAA for working with the FTC and responding to the Commission’s feedback, and for the steps taken by the DAA to prohibit the use of web viewing data for eligibility purposes.
Rich closed her remarks by encouraging the DAA to continue to improve its existing program and the number of companies that participate. She commented that the DAA and industry should continue to focus on transparency, so that consumers can understand how choice tools work and the effect of their choices. She said industry should continue to focus and press forward on “do not track,” and that browser choice is a “logical extension to the good work already done.”
Later in the Summit, Vice President of State Affairs Chris Oswald and I were featured in a workshop on DAA compliance entitled, “Navigating Implementation Challenges and Requirements.” In this workshop, Chris and I walked through compliance scenarios and provided tips for staying on the right side of the compliance process wherever companies do business. Specifically, we discussed: 1) how DMA’s accountability program works— as well as how it is different from and compatible with the Council of Better Business Bureau’s program; 2) what DMA is hearing from consumers through our complaint process; and, 3) what all of that means for member companies— now and going forward.
Genie Barton from the Council of Better Business Bureaus described how their enforcement program works, and I highlighted two key differences in DMA’s enforcement approach. First, the DMA’s Accountability Program is consumer complaint driven. The communications and complaints DMA receives are what drive the process, with a consumer complaint being the starting point for every compliance or enforcement action that DMA takes. Second, DMA’s program is confidential (in most cases). The accountability process is confidential until and unless a company refuses to do the right thing. Companies in violation have the opportunity to work with DMA to resolve the issue and know that DMA will not go public as long as the violations are remedied.
I also talked about what DMA has heard over the past six months from consumers in our complaint process. DMA has received more than 450 complaints that fall into three big categories: 1) complaints about advertising in general; 2) complaints about the content of ads; and 3) complaints about issues specific to online behavioral advertising.
Finally, I discussed the most important bottom line coming out of DMA’s Accountability Program, which is that consumer education is both necessary and effective. Though DMA receives a number of inquiries about online advertising, a vast majority of those inquiries turn into opportunities for consumers to better understand and appreciate how online advertising works, and the value they receive from targeted ads.
In arguably the most important part of the Summit, the DAA announced its development of an application that enables consumers to opt-out of behavioral advertising on smartphones and tablets. This application marks the DAA’s latest step in implementing its mobile privacy code, which sets out rules for collecting data and serving ads on mobile devices. The mobile application will soon be available as a free download that allows users to set their preferences for relevant ads in the application environment with just a few taps of their mobile screens.
The DAA also revealed that it will be coming out with a mobile-optimized version of DAA’s existing desktop choice tool, designed to be easier to use on smaller screens, as well as give users control over relevant ads in mobile browsers. Both of these mobile tools will be made available to consumers this fall.