WASHINGTON – House Republicans called into question a universal, federally-sponsored do-not-track tool for the Internet saying in a hearing Thursday that it would curb profits for the Internet advertising industry.
In a report released Tuesday, the Federal Trade Commission endorsed the idea of a do-not-track system to protect consumer privacy on the Web, where advertising companies store user data in an effort to display ads targeted at their interests.
“I assume most customers would be interested in seeing advertising that was relevant to them,” said Rep. Ed Whitfield, R-Ky., the ranking member of the subcommittee on Commerce, Trade, and Consumer Protection. “We need to be mindful not to enact legislation that would hurt a recovering economy.”
The trade commission stopped short of calling for legislation in its report but did say that the industry’s attempts at self-regulation owing to privacy concerns had developed too slowly.
Such a tool “would allow consumers to exercise choices about online tracking in a simple, persistent and universal way,” said David Vladeck, head of the commission’s consumer protection bureau.
But a robust do-not-track option could hobble advertising, the Internet’s main revenue stream and one of the few growing sectors of a sluggish economy.
Several Democratic representatives have said they would support some form of legislation to enforce do-not-track provisions on the Internet.
Rep. Edward Markey, D-Mass., proposed legislation Wednesday that would seek to stop companies from tracking the online browsing habits of children. He said that some sites targeted at children employ more tracking software than their adult-focused counterparts. It is unclear how such legislation would distinguish Internet use by children from that of their parents.
Daniel Weitzner, a telecommunications policy analyst at the Department of Commerce, noted that online transactions amounted to $3.7 trillion dollars annually.
A growing percentage of that Internet economy is dedicated to tracking and storing information about consumers catalogued by their personal Internet protocol address, Weitzner said.
“Data collection restrictions are blunt instruments,” he said, in response to a question whether the government should allow tracking of information but not the storage and sale of it .
The do-not-track proposal follow the loose principles of do-not-call registries created in the past to thwart telemarketers, but the Internet presents a much different challenge to regulators.
The FTC report suggests that placing universal do-not-track preferences within browsers would be a logical step. The commission’s Vladeck said creating a centralized list was not an option being considered.
The major browsers – Microsoft’s Internet Explorer, Google’s Chrome, Apple’s Safari and Mozilla Firefox – all incorporate some form of anonymity options through preferences or third-party plug-ins.
The companies behind the browsers reacted coolly to the proposal, touting the privacy functions already in place and saying they would study the proposal further.
Joan Gilman, a media sales executive at Time Warner Cable, said a do-not-track list would likely dampen the healthiest revenue stream the Internet has available.
“It may also deter the provision of free online advertiser-supported content and inhibit innovation,” Gilman said.