The Federal Trade Commission today made a welcome announcement of new privacy principles for online advertising amid their decision to approve the merger of online search giant Google Inc. and DoubleClick Inc., the largest provider of online display ads. The proposed principles address “behavioral advertising,” in which ads are delivered based on behavior such as search requests, Web pages visited, and content viewed.
In a recent article, I proposed a common sense test for behavioral advertising—consumers should have a realistic choice about whether they are tracked in cyberspace. The FTC guidelines today accept this idea: Web sites that do behavioral advertising should “give consumers the ability to choose whether or not to have their information collected for such purposes.”
For current Web practices, many tracking technologies don’t give consumers a realistic choice. They should.
Yet in today’s decision to approve the Google-DoubleClick merger, the Commission missed the chance to explain more clearly how privacy indeed fits into antitrust law. In our information economy, privacy is an important quality of consumer search and other goods. Quality is a traditional part of antitrust analysis. Going forward, privacy should be considered in future mergers where the facts warrant it.
Commissioner Pamela Harbour agreed. In her dissenting opinion on the merger, she cited my testimony on antitrust and privacy. She recognized that antitrust law should ensure competition “based on privacy protections or related non-price dimensions.” She went further, emphasizing that future merger requests should receive detailed questions about data practices in “second requests,” which are the questions that the FTC sends companies when it is investigating mergers.
On balance, though, today’s announcements significantly raise the profile of privacy issues for antitrust and online advertising. Commissioner Jon Leibowitz wrote a statement explaining the importance of privacy to online advertising and the need to bring enforcement actions if antitrust problems emerge in the future. All five Commissioners supported the new privacy principles for behavioral advertising.
In our information economy, the uses of that information become ever more important. We need good privacy and antitrust protections to make sure that we get an Internet that works for business and also for each individual.
For more information, see:
Testimony to the FTC on Antitrust and Privacy, Oct. 19 2007
Privacy and Online Profiling, Dec. 18, 2007