Online Privacy Concerns Spread To Europe
The controversy surrounding a potential online privacy bill which attempts to partially regulate the use of behavioral targeting has not yet abated in the U.S. and it is now spreading to Europe.
A few days ago, the Office of Fair Trading (OFT) in London published a market study of behavioral advertising, saying that â€œmore could be done to provide consumers with better information about how personal information is collected and used.â€ While the OFT admitted industry self-regulation â€œaddresses some concerns,â€ it did not rule out additional regulation as a solution.
In the U.K., under laws enforced by the Information Commissionerâ€™s Office (ICO), it is a legal requirement for firms to clearly inform consumers about the purposes of storing a cookie or other tracking system on the userâ€™s computer and to provide people with the opportunity to opt out. But the OFT may want to strengthen this by applying the Consumer Protection from Unfair Trading Regulations 2008, which could prevent consumers from being misled about the collection of information, including online information.
The OFT is also concerned about what it calls â€œtargeted pricing practices,â€ or online targeting of pricing based on previous purchases, browsing behavior, or geographic location. The OFT says consumers who knew that targeted prices were being applied changed their behavior, so failure to inform consumers about the practice would trigger possible enforcement action by the OFT. The OFT claims â€œresearch suggests that consumer opposition to such practices would be very strong.â€
In effect, the ICO and OFT could possibly collaborate to provide tougher regulation of behavioral targeting â€œshould industry action prove ineffective.â€
Heather Clayton, an OFT senior director, puts the onus on the industry to self-regulate, stating
â€œDiscussions now about the potential for both benefits and harm, and how consumer protection legislation applies, will stand us in good stead in the event that industry action proves ineffective or targeted pricing becomes a reality.â€
Seamus Reilly, Head of Information Security, Technology and Security Risk Services in the U.K. office of consulting firm Ernst & Young, saw the move as a salvo from the British government to enforce opt-out practices. He told The Wall Street Journal,
â€œOrganizations which do not provide such transparency will increasingly find themselves under scrutiny from our data protection commissioner as customersâ€™ awareness of this issue grows.â€
So battle lines are being drawn here in the U.S., and now in Europe. Apparently, governmental regulators will continue to threaten to legislate their way through online privacy issues unless they see evidence that the industry is taking what, in their view, is effective action.
Something is bound to change soon â€“ and it will likely mean the use of behavioral targeting will be regulated, one way or the other.