WASHINGTON — The Federal Trade Commission Wednesday endorsed the idea of a “do not track” mechanism that would allow consumers to opt out of certain varieties of targeted online marketing that have gained popularity among retailers.
The endorsement was one piece of a larger preliminary staff report on consumer privacy in which the commission proposed a framework it says would simplify and streamline online privacy protections for consumers.
Among the issues addressed in the report is how consumer activity online can be tracked, stored and used by third parties to target ads to consumers. The commission said first-party marketing, where a company communicates directly with a user based on their purchases on its site, is not at issue.
What could be affected by the FTC proposals are practices like retargeting, where consumer activity online is tracked and used to serve ads up to potential customers after they’ve left a site. Most retailers have started using retargeting in the last year because it boosts conversion by several points. So, for example, if a Web surfer were to visit The New York Times after browsing at Saks, she might see a display ad for Saks on the Times’ Web site.
The FTC said the “do not track” function it suggests is likely to take the form of a “persistent setting” on consumers’ browsers that would allow consumers to opt out of having their information tracked and communicate that preference to Web sites.
The National Retail Federation is concerned about the potential impact of the policy on how retailers communicate with their consumers, said Mallory Duncan, senior vice president and general counsel for the industry group.
“Targeted ads are more likely to be for those things you’re interested in buying based on your behavior,” he said, which eliminates “cold” advertising for products that a consumer has no interest in.
The FTC is seeking comments on the report from industry stakeholders and any interested parties by the end of January. The report is seen as a preliminary indicator of where the agency could be headed on official guidelines.
A House subcommittee will hear testimony today from administration officials on whether the timing is right to introduce “Do Not Track” legislation.