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"Consumers are often oblivious to the fact that some businesses share a great deal of their personal information with other businesses who deliver targeted behavioral advertising, says Anzen analysts Megan Brister and Jordan Prokopy. In an e-mail interview with IT Business Edge editor Lora Bentley, Brister and Prokopy say most consumers are just not aware of the business practices of companies that use personal information for profit. The Federal Trade Commission recently held meetings with consumer and privacy advocates, business and government leaders to discuss privacy, regulatory, and business issues of online behavioral advertising. It plans plan to ramp up efforts to protect consumers and possibly push for tougher legislation to protect consumers. One issue, Brister and Prokopy say, is the lack of transparency by companies that engage in behavioral advertising. These companies have been slow to adopt clear data-management policies and even when they do have policies, they are often written in language that is difficult to understand. Fortunately for consumers, some type of regulation appears to be on the way. The FTC appears eager to penalize businesses who lack transparency regardless of whether the consumer actually experienced any real negative effects as a result, Brister and Prokopy say."

"Lora Bentley spoke with Anzen analysts Megan Brister and Jordan Prokopy via e-mail regarding behavioral advertising - what companies are doing, what regulators want to do and what we, as advertising consumers, need to know. With their coworker Miyo Yamashita, the analysts recently wrote a guest opinion for IT Business Edge. Bentley: Why are so many concerned about privacy when it comes to behavioral advertising? What is it about the Internet that convinces consumers that information they share there is not being used? Brister and Prokopy: Most concerns stem from the lack of transparency around data disclosure practices. While consumers may value a Web site's product and service offerings, they are generally unaware that businesses share their information with an extensive group of other businesses in order to deliver targeted advertising. This group includes news Web sites, advertising networks, profiling services, and Web analytics providers, to name a few. As Pamela Jones Harbour, a Commissioner at the Federal Trade Commission (FTC), discussed at the FTC Roundtable earlier this week, there is an asymmetry between consumer perceptions and business realities. Once consumers are informed of businesses' data handling practices, they will want to have more control over how businesses manage their information. As we discuss in our article, some businesses engaged in online behavioral advertising have been slow to adopt transparent consumer data management policies. This is a concern particularly for vulnerable groups, such as minors or non-English speaking consumers, because they may not understand legally written policies. Consumer advocacy groups argue that without knowledge and control over the collection, use, and disclosure of data, Web sites may misuse or expose sensitive data about consumers' health, lifestyles and finances."

Former Booz Allen Hamilton management consultant Melissa Hathaway's much anticipated 60-day review of U.S. cybersecurity policy is scheduled to hit President Obama's desk this Friday. All eyes of the tech security community will be watching. It will signal what approach Obama will take in the complicated task of stemming cyber threats. Obama has said he will make the Internet safer for citizens and businesses, while playing catchup to China and Russia who are far ahead in the cyberwarfare arms race. "We're trying to do cybersecurity in a democracy," says Leslie Harris, President and CEO of the Center for Democracy & Technology. "Doing cybersecurity in China, my guess, is a lot easier." CDT held a press briefing this morning at which it warned that a cybersecurity bill, introduced earlier this month by Sen. John Rockefeller, D-W.Va, and Sen. Olympia Snowe, R-Maine, is the first of several that likely will be proposed once Hathaway's review is out. Harris said CDT agrees with a provision in the Rockefeller-Snowe bill that would create a cabinet-level cybersecurity adviser reporting directly to President Obama, but questions some of the extraordinary federal enforcement powers that could be created. CDT says it doesn't want citizens' civil liberties trampled upon. CDT general counsel Greg Nojeim gave Hathaway high marks for keeping her review process relatively open, in contrast to the Bush administration's penchant for secrecy. "So far the White House review team gets high grades on transparency," Nojeim said. Hathaway has held closed briefings in the past several weeks with Congressional committees, industry groups and privacy organizations, said Nojeim. "But the real test will be whether their recommendations reflect a commitment to transparency in the execution of the program," said Nojeim.

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"Yahoo released a beta of a tool, Ad Interest Manager, designed to be a transparent user dashboard for privacy. It works. Yahoo has everything from your surfing habits to your operating system to your screen resolution. The tool gives users a one-stop shop to opt out of ad categories (statement). As Yahoo notes on its overview: To make our ads more relevant and useful for you, we make educated guesses about your interests based on your activity on Yahoo!'s sites and services. Some of the ads we show you reflect these interests. You can opt out of interest-based advertising altogether using the tools on this page. Here's what it looks like:"

As the impact of digital advertising on consumer privacy comes under scrutiny, AT&T is taking a stance in support of stricter standards. Rep. Rick Boucher (D., Va.), chairman of the subcommittee, said in an interview Wednesday that a statute is needed to regulate how companies collect, share and use data on consumers' behavior in targeting online advertising. While ad targeting on the Web has been at the forefront of privacy advocates' concerns, worries are growing about other media, ranging from mobile phones to emerging TV technologies. To sell marketers targeted ads, technology and media companies collect data about customers, ranging from the Web sites they visit to the neighborhoods they live in to the TV shows they watch. Marketers often will pay a premium for this form of advertising because it allows them to show their ads to consumers who are likelier to buy their products or services. "Pitfalls arise because behavioral advertising in its current forms is largely invisible to consumers," says Dorothy Attwood, AT&T's senior vice president of public policy and chief privacy officer, in prepared testimony she is expected to deliver at the hearing of the House Subcommittee on Communications, Technology and the Internet. Her statement says consumers don't fully understand that their online activity is used to create detailed profiles of them. Internet and other media companies say the data they use to target ads are anonymous and can't be traced to individual consumers. AT&T plans to argue that consumers should have "full and complete" notice of what information is collected about them and how it is used and protected, and should have tools that let them determine whether their Web activities are being tracked. The company says it won't use consumer information for online behavioral advertising unless it first obtains consent from the consumers involved. AT&T's stance contrasts with the position taken by most big Internet companies and industry trade grou

The Homeland Security Department's privacy office will hold a conference to explore the use of social media as if affects security and privacy. The "Government 2.0: Privacy and Best Practices" conference will be held June 22 to June 23 in Washington and is open to the public. The workshop is meant to help agencies use Web 2.0 technologies in ways to protect privacy and security, and to explore the best practices for implementing President Barack Obama's memo on open government that was released in January, according to a notice published in the federal register April 17. Panelists will discuss topics such as transparency and participation in government, privacy and legal concerns brought by the government's use of social media, and how the government can best use the technologies while protecting privacy rights during the conference, DHS officials said. DHS is asking for comments by June 1 on topics such as: * How the government is using social media. * The risks, benefits and operational concerns that come from government use of the technologies. * Privacy, security and legal issues raised by the government's use of social media. * Recommendations on best practices for government use of the technologies.

More consumers are growing comfortable with online behavioral targeting, perhaps as a result of an increase in familiarity, but the majority remain uneasy with the practice. That's according to a new study conducted by TNS on behalf of the privacy group Truste. For the study, consumers were asked whether they agreed or disagreed with the statement: "I am comfortable with advertisers using my browsing history to serve me relevant ads, as long as that information cannot be tied to my name or any other personal information." Twenty-eight percent of respondents agreed, up from 24% who agreed when the same study was conducted last year. At the same time, 51% said they disagreed that they were comfortable with anonymous behavioral targeting. While that figure represents a slim majority, it's down from last year, when 57% of respondents said they disagreed. At the same time, more respondents than in the past now say they delete cookies. Almost half--48% of survey respondents--said they erase cookies at least weekly, up from 42% last year. It's not clear how much overlap there is between the respondents that regularly delete cookies and those who say they're uncomfortable with behavioral targeting. Colin O'Malley, vice president of strategic business at Truste, attributed the increase in the proportion of consumers who said they were comfortable with behavioral targeting to increased publicity over the issue. He said the recent attention to the issue in the mainstream media has helped to increase transparency. He added that the increased cookie erasures showed that consumers want to be able to manage their experience. "Cookie deletion is just one more indication that consumers are seeking tools to increase their level of control," he said.

Most Americans believe the world financial crisis has increased their risk of identity theft or related crimes, according to the latest Unisys Security Index. The biannual survey of consumers in nine countries found that more than two-thirds of Americans are "extremely or very concerned" about other people obtaining and using their credit or debit card details -- with 90 percent at least "somewhat concerned." In addition, computer security remains a major concern. More than 40 percent of Americans are extremely or very concerned about security in relation to viruses or unsolicited emails. Three-quarters of Americans believe that the world financial crisis will increase the risk that they will personally experience identity theft or related crimes. More than one-quarter believe that the risk will increase substantially. "Financial security for Americans has moved from third place to front and center, number one," Tim Kelleher, vice president of enterprise security at Unisys, provider of information technology consulting services, told SCMagazineUS.com Monday. "People feel they are much more financially at risk." This has major implications for banks and other financial institutions, as well as internet businesses, he said. "Banks and businesses need to understand that customers are more wary than ever about using services that may compromise their personal data," Kelleher said. "If economic concerns increase these fears, companies need new strategies to strengthen customer confidence through accountability and transparency, which also plays to part of the Obama administration's call to action for government and business." The U.S. Security Index is based on a random telephone survey of 1,004 persons ages 18 and over. The first wave of the study was conducted in August 2007.

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It's never been easier to get information on the run. Smart devices such as the G1 and Apple iPhone let you put the Internet in your pocket and go - down the block or across the country. But this convenience could cost plenty in lost privacy, consumer advocates and tech analysts say. Once data have been collected and warehoused, you lose control of it forever. "The Big Brother aspect of it is troubling," says Rep. Edward Markey, D-Mass., former chairman of the powerful House Subcommittee on Telecommunications and the Internet. Mobile consumers are especially vulnerable, Markey says. Unlike PCs, cellphones tend to be used by one person exclusively. The information they telegraph - on Web browsing, lifestyle and more - tends to be "highly personalized." That's the main reason mobile data are so prized: The information is incredibly accurate. It's also why Markey and other privacy advocates say the debate about online privacy will become even more intense as advertising migrates to the mobile Web. Mobile advertising is still relatively new - G1 users, for now, get ads only through search results, for instance - but it's clearly a hot spot. The market is expected to reach $2.2 billion by 2012, from about $800 million now, according to JupiterResearch. Ultimately, it could surpass the traditional Web, now a $20 billion ad market. Yahoo, Microsoft and other ad-supported search engines collect information as Google does. But the sheer size and scope of Google's data-mining operation - the Web giant performs more than 80% of all desktop searches worldwide - makes it a uniquely pervasive presence, says Chester. Google and Yahoo, the two biggest players in search advertising, say their self-imposed privacy policies are sufficient to protect consumers, noting that they do not collect or store information in a way that can be directly tracked to an individual. Peter Fleischer, global privacy counsel for Google, says Google tries to make privacy language as

To address important consumer privacy concerns associated with online behavioral advertising, the staff of the Federal Trade Commission today released a set of proposed principles to guide the development of self-regulation in this evolving area. Behavioral advertising is the tracking of a consumer's activities online - including the searches the consumer has conducted, the Web pages visited, and the content viewed - in order to deliver advertising targeted to the individual consumer"s interests. For more than a decade, the FTC has engaged in investigation, law enforcement, studies, and other privacy developments to protect consumers' privacy online. Concepts used to develop the principles emerged from the agency's longstanding privacy program and, more recently, from two conferences hosted by the FTC. In the fall of 2006, a three-day public hearing, "Protecting Consumers in the Next Tech-ade," examined technology developments that could raise consumer protection policy issues, including privacy, over the next decade. This past November, building on the Tech-ade hearings, the FTC hosted a Town Hall entitled "Ehavioral Advertising: Tracking, Targeting, and Technology," to focus in on privacy issues raised by behavioral advertising. "The purpose of this proposal is to encourage more meaningful and enforceable self-regulation to address the privacy concerns raised with respect to behavioral advertising. In developing the principles, FTC staff was mindful of the need to maintain vigorous competition in online advertising as well as the importance of accommodating the wide variety of business models that exist in this area," according to its proposal "Behavioral Advertising: Moving the Discussion Forward to Possible Self-Regulatory Principles." The proposal states that behavioral advertising provides benefits to consumers in the form of free content and personalized advertising but notes that this practice is largely invisible and unknown to consumers. To address the

Last month, the digital advertising industry's use of behaviorally targeted advertising gained a reprieve of sorts when the Federal Trade Commission issued a final report confirming its earlier support of self-regulation. But some commission members remained concerned about ads that are shown to Web users based on their previous online activities, and in particular the possibility of violations of online privacy. Some form of legal restrictions may be imposed on the industry, the FTC indicated, if the online ad industry isn't up to the task of regulating itself. "Privacy is definitely the biggest concern today," said Joe Apprendi, CEO of Collective Media, an online advertising network based in New York. "There has been the concern that through such approaches as deep-packet technology, companies can leverage information through subscriber-based providers to marry anonymous behavioral segment data and identify real people. "The fact is, online advertising is subject to a higher standard that offline direct marketing tactics," Apprendi said. The FTC report, "Self-Regulatory Principles for Online Behavioral Advertising," continues to advocate voluntary industry self-regulation, in keeping with its principles governing online behavioral advertising issued at the end of 2007, despite the urgings of consumer advocacy groups that it impose rules regulating online advertising. The commission's new guidelines are based on four principles: * Transparency and consumer control. The commission advises that Web sites that collect data for behavioral advertising provide "a clear, concise, consumer-friendly and prominent statement" that the data are being collected to provide ads tailored to the user's interests and that the user has an easy and obvious way to choose whether to allow this. * Security for data retention. Companies that collect data for behavioral advertising should provide "reasonable" protection of that information and reta

Google, Microsoft, Yahoo support self-regulation in the UK AOL, Google, Microsoft, NebuAd, Phorm, and Yahoo promise to behave. All of these companies - along with a few others - have volunteered to honor the Internet Advertising Bureau's just-announced set of Good Practice Principles. So on to the guts of the agreement. First, companies are supposed to tell users whenever they're collecting data for the sake of behavioral advertising. They're also expected to make sure users understand what the procedure entails. Then comes the key part: users should get the chance to opt out of the collection process. Ad companies are probably hoping that users will either be too lazy to take action or will actually prefer better-targeted ads. If so, the companies will continue to make money and improve their public image. But since privacy advocates may still complain that data collection isn't an opt-in matter, the issue isn't likely to go away. Mark Howe, the country sales director of Google UK, sidestepped the mess, simply stating, "Google believes in two core principles of transparency and choice when it comes to user privacy. That is why we are supportive of these new, self-regulatory principles for online advertising which will enable consumers to increase their understanding of their web surfing options." IAB described the Principles as "the UK's first self-regulatory guidelines to set good practice for companies that collect and use data for online behavioural advertising purposes." The Principles have been approved by the Information Commissioner's Office, which reports directly to Parliament.

Following on the heels of Facebook's decision to rescind a highly controversial move to store all content posted on the social network, new data has emerged to support consumers' increasing alarm over online privacy. The vast majority--80.1%--of Web surfers are indeed concerned about the privacy of their personal information such as age, gender, income and Web-surfing habits, according to a survey of some 4,000 Web users administered and analyzed by Burst Media. More worrisome, perhaps, is the finding that privacy concerns are prevalent among all age segments, including younger demographics that are coming of age online. Still, privacy concerns do appear to increase with age, from 67.3% among respondents ages 18-24 to 85.7% of respondents 55 years and older. "Online privacy is a prevailing concern for web surfers," said Chuck Moran, vice president of marketing for Burst Media. The survey was administered by Burst with the purpose of better understanding how privacy is impacting Web users' experiences online, as well as its impact on advertisers. "Advertisers must take concrete actions to mitigate consumers' privacy concerns and at the same time continue to deliver their message as effectively as possible," Moran added. "In addition, and as recently seen in the news flare up regarding Facebook's privacy controversy, publishers need to be completely transparent about their privacy policies." Facebook recently changed its terms of use agreement, which gave the Palo Alto, Calif.-based company the ability to store user-posted photos and other content, even after it was deleted by users themselves. Earlier this week, however, the company reverted to a previous version of its legal user guidelines after thousands of members protested that Facebook was claiming ownership over the content. In addition, the Burst survey found that most Web users believe Web sites are tracking their behavior online. Three out of five--62.5%--respondents indicated it is likely that a W

Big Brother may be at it again. Behavioral advertising - the tracking of consumer's Internet surfing activity to create tailored ads - has triggered an intense legal controversy that has law firms scrambling to stay on top of a burgeoning practice. Attorneys say that behavioral advertising is raising privacy, litigation and regulation fears among consumer advocates, the electronic commerce and advertising industries and legislators. Law firms are busy helping companies come up with a transparent way of letting consumers know that their online activities are being tracked and possibly shared. "Lawmakers and companies are having a tough time keeping up with this new frontier of Internet privacy issues, and there is growing consumer unrest about behavioral advertising, leading in some cases to consumer rebellion," said Lisa Sotto, a partner and head of the privacy and security data group in the New York office of Richmond, Va.-based Hunton & Williams. "Consumers find this type of tracking intrusive, and businesses are starting to take the consumer reaction seriously," she said. The buzz over behavioral advertising has been building since congressional hearings that were held last year, during which Congress called on Internet service providers (ISPs) to testify about a highly controversial advertising practice known as "deep-packet inspection." The practice gives companies the ability to track every Web site consumers visit and provides a detailed look at everything they're doing, such as where they're going on vacation, who is going, how much they spent on the trip and what credit card was used. But then came the first class action targeting behavioral advertising, filed against Foster City, Calif.-based NebuAd Inc., an online advertising company accused of spying on consumers from several states and allegedly violating their privacy and computer security rights. The lawsuit specifically alleges that NebuAd engaged in deep-packet inspection. Valentine v. Ne

The Department of Homeland Security's Data Privacy and Integrity Advisory Committee has offered DHS Secretary Janet Napolitano 16 recommendations on how to best address privacy issues currently facing the department. The panel stressed that "the need to update the government's legal authority to protect and defend cyberspace in the U.S. classified intelligence systems raise specific and sometimes significant privacy issues, including the conflict between transparency and redress." The committee has asked that each DHS component - such as the Federal Emergency Management Agency and Office of Intelligence and Analysis - have a designated privacy officer that would report to the head of the section. The committee also "encourages DHS to continue to work toward policy and functional interoperability in the development of new systems and when making major modifications to existing systems," according to a letter from the committee hand delivered to Napolitano. Additionally, the panel said the 1974 Privacy Act has "not kept pace with the evolution of technology and developments in how data is collected, used, shared and stored. To the extent the Secretary is asked to submit recommendations to Congress for making the act more relevant and effective, the committee recommends that the secretary seek guidance from the Privacy Office staff, who are experts in applying the Act's provisions throughout the department." For more on the recommendations, read the committee's letter here.

The largest threat to online advertising is growing as the economy declines. More individuals will turn criminal, purchasing products or generating income through fraudulent means. Billions of dollars are stolen from businesses each year, and in 2009 companies will fight fraud with fewer resources.According to CyberSource, an estimated $4 billion dollars was lost to fraud in 2008 up from $3.7 billion in 2007, and 87% of merchants must fight fraud with the same or less staff in 2009. The increase in eCommerce fraud from 2007 to 2008 (and one can expect, in 2009) follows the advertisers' shift to spend more of their budget online. Much like crime statistics, one has to wonder how much fraud is not being reported because, among many reasons, commission-driven employees are not motivated or your company lacks resources.In early 2008, I was approached by our CEO to start a new division that would address our partners' fraud concerns-both real and perceived. He said, "I'm not going to lie to you. It's a SOB job." I was sold, and the Best Practices Division began.My team establishes best practices (measurable, repeatable events, processes, and procedures) and applies them internally and externally (to our partners' online marketing practices). At its core, best practices (BPs) are a set of standards that provide transparency and clear expectations of behavior and results to everyone involved in the business process. This accountability will drive the long-term performance of the online advertising industry while maintaining profitability without additional federal regulation.The BP approach can be applied to every business model and used to fight fraud-wherever you find it. Industry norm places the onus on the advertiser to successfully qualify inbound leads as well as identify fraudulent traffic. In the past, advertisers had only two options: become an online fraud expert, or hire a vendor.Only a small percentage of companies will be successful with the

The Office of the Privacy Commissioner of Canada (OPC) has developed these guidelines to explain how the Personal Information Protection and Electronic Documents Act (PIPEDA) applies to transfers of personal information to a third party, including a third party operating outside of Canada, for processing. As the legislation itself states, PIPEDA is intended to "support and promote electronic commerce by protecting personal information that is collected, used or disclosed in certain circumstances…" This acknowledges that proper protection of personal information both facilitates and promotes commerce by building consumer confidence. Today's globally interdependent economy relies on international flows of information. These cross-border transfers do raise some legitimate concerns about where personal information is going as well as what happens to it while in transit and after it arrives at some foreign destination. Consumer confidence will be enhanced, and trust will be fostered, if consumers know that transfers of their personal information are governed by clear and transparent rules. There are different approaches to protecting personal information that is being transferred for processing. European Union member states have passed laws prohibiting the transfer of personal information to another jurisdiction unless the European Commission has determined that the other jurisdiction offers "adequate" protection for personal information.

The Electronic Privacy Information Center formally asked the Federal Trade Commission on Tuesday to investigate the privacy and security safeguards of Gmail, Google Docs and other so-called cloud computing services offered by Google to consumers. The filing points to a security breach earlier this month that may have improperly exposed the files of Google Docs users to others. It asks the F.T.C. to look into the adequacy of privacy and security safeguards of Google's services and to require Google to be accountable for breaches. It also asks the agency to force Google to make its security policies more transparent and to disclose any breaches. It also asks the F.T.C. to enjoin Google from offering cloud computing services until it establishes verifiable safeguards. The full filing is available here. Marc Rotenberg, EPIC's executive director, said he was concerned about all cloud computing services, which encourage users to store a growing number of documents on the servers of companies like Google, Yahoo, Microsoft and others. But he said that EPIC focused on Google because it is the primary provider of cloud computing services to consumers.

Now that behavioral targeting has become more pervasive (and more effective), it is being talked about not only by publishers and advertisers, but also by privacy advocates -- organizations like the NAI and IAB and, in Washington, the FTC. At issue is if BT players are doing enough to disclosure to consumers how BT works and offering them the opportunity to opt out of being tracked by BT vendors and publishers. There has been much discussion about how to regulate behavioral marketers; but no solution that satisfies everyone. The BT industry so far has contended that website privacy policies are sufficient disclosure since many of them contain links to opts out opportunities like the NAI site. Google and Bluekai have announced 'preference pages' or registries that allow Web users to say what type of BT they are interested in receiving. But, the other, more common option is to put that information in the Privacy Policy of the site. But the problem with that is that no matter where disclosures are placed on the service provider's site, most people won't ever see them. How will a customer visiting Retail SiteX know that Company Y is going to use their browsing behavior to later display relevant ads to them as they surf the Web on Network Z? The average customer won't. The only way a customer will know what forms of BT advertisers are using is if the advertisers themselves tell them. I think that it's time for advertisers to step up in this privacy debate. Thus far the pressure for disclosure has been placed on networks, behavioral marketing providers and publishers. The key players in those industries have done a good job of becoming more transparent (though there is still work ahead of us), while advertisers haven't been asked to do anything. Advertisers are clearly benefiting from behavioral marketing, and its time they disclosed what type of behavioral marketing they participate in, and allow customers to opt-out. How they do this is open for discussion: Tag each

Big Brother may be at it again. Behavioral advertising -- the tracking of consumer's Internet surfing activity to create tailored ads -- has triggered an intense legal controversy that has law firms scrambling to stay on top of a burgeoning practice. Attorneys say that behavioral advertising is raising privacy, litigation and regulation fears among consumer advocates, the electronic commerce and advertising industries and legislators. Law firms are busy helping companies come up with a transparent way of letting consumers know that their online activities are being tracked and possibly shared. "Lawmakers and companies are having a tough time keeping up with this new frontier of Internet privacy issues, and there is growing consumer unrest about behavioral advertising, leading in some cases to consumer rebellion," said Lisa Sotto, a partner and head of the privacy and security data group in the New York office of Richmond, Va.-based Hunton & Williams. "Consumers find this type of tracking intrusive, and businesses are starting to take the consumer reaction seriously," she said. The buzz over behavioral advertising has been building since congressional hearings that were held last year, during which Congress called on Internet service providers (ISPs) to testify about a highly controversial advertising practice known as "deep-packet inspection." The practice gives companies the ability to track every Web site consumers visit and provides a detailed look at everything they're doing, such as where they're going on vacation, who is going, how much they spent on the trip and what credit card was used. But then came the first class action targeting behavioral advertising, filed against Foster City, Calif.-based NebuAd Inc., an online advertising company accused of spying on consumers from several states and allegedly violating their privacy and computer security rights. The lawsuit specifically alleges that NebuAd engaged in deep-packet inspection. Valentine v. Ne