Boucher Proposes to Regulate Online Ads

Published May 1, 2009

A Virginia congressman is calling for the federal government to restrict the ability of Internet companies to target Web ads based on the sites users like to visit—a common practice known as “behavioral advertising.”

Rep. Rick Boucher (D-VA) told Reuters “there should be a minimum set of statutory requirements that should apply to all behavioral advertising.”

Boucher’s call counters a February Federal Trade Commission report in which the agency concluded it was “encouraged” by the Internet community’s “self-regulation” and did not recommend additional Congressional action.

Boucher, chairman of the House Subcommittee on Communications, Technology, and the Internet, argues the federal government should issue a new and wide-ranging set of laws explicitly mandating how online ad-targeting companies can operate in collecting, sharing, and using data about consumers.

Idea Raises Concerns

Ralph Benko, tech expert and author of How to Use the Web to Transform the World, is concerned about Boucher’s idea—and others bouncing around Congress—to impose new regulations on Internet companies.

The industry, Benko says, already has an incentive to avoid violating customers’ privacy.

“All online businesses, such as Google, know that their customer base is incredibly fickle,” Benko said. “And they know if they violate a user’s expectation of privacy—as Facebook did recently—they will be punished.

“That punishment comes much more rapidly, severely, and effectively from their own customer base than by a bunch of gumshoes from Washington investigating the privacy policies of high-tech companies,” Benko noted.

Reluctant to Endorse Boucher

Richard Bennett, a consultant to several major Internet carriers and content providers, notes the online ad-targeting industry has committed some violations of privacy, but he is reluctant to endorse Boucher’s call for increased regulation.

Bennett calls Google one of the “most worrisome violators of privacy rights” online. The Mountain View, California-based firm is one of the largest players in the online ad-targeting industry.

“I dropped Google Adsense from my blog after reading Google’s privacy warning language regarding behavioral advertising,” Bennett said. “I don’t want to force my readers to make a vexing personal privacy decision before reading my musings on networking and regulation.

“This is an example of the way a free market responds to privacy concerns, and I maintain that Google’s ‘interest-based advertising’ campaign is too new to regulate any other way than by informed personal choice,” Bennett said.

Congress’s Expertise Questioned

Bennett says he’s wary of attempts by Congress to regulate new technologies such as the Internet because the legislators don’t have sufficient expertise in the field.

“The impulse by members of Congress to shackle every new technology they don’t understand with heavy regulations is not helpful in this case—if it ever is,” Bennett said. “If we need any regulations at all, they should emphasize full disclosure.

“If untoward things happen as a result of Google’s ad system, they can be dealt with as they occur and as we understand them better,” Bennett added. “Prophylactic regulation is rarely a wise practice.”

Avoiding Slippery Slope

Benko believes Congress will start down a slippery slope if it begins focusing on regulating the Internet.

“Once Congress starts regulating the Web, who knows where it will stop?” Benko asked. “Congress can so easily destroy the Web. It is much more delicate than it appears on the outside.”

Benko also notes Tim Berners-Lee, widely considered the “inventor” of the World Wide Web, is building comprehensive privacy protections into a new version of the Internet called “the Semantic Web.”

“Rather than attempting to regulate the Web—which few members of Congress really understand—why not trust us citizens to look out for ourselves?” Benko asked. “Indeed, there are other search engines besides Google. Rep. Boucher, and any of us, can and will go there in a nanosecond if we feel our privacy is being violated.

“Google is only trying to direct its ads to the people who would actually be interested in seeing them,” Benko added. “I wish TV could do that.”

Thomas Cheplick ([email protected]) writes from Cambridge, Massachusetts.

For more information …

“FTC Staff Report: Self-Regulatory Principles for Online Behavioral Advertising,” February 2009, Federal Trade Commission: