Google, AOL execs: Opting out of targeted ads OK by us

WASHINGTON--As advocacy groups bristle at online advertisers' increasingly sophisticated targeting techniques, top privacy lawyers at Google and AOL on Thursday backed "opt-out" technology as a way to give Internet surfers more say in the process--although they admitted it's far from perfect.

At the moment, a group called the Network Advertising Initiative allows Internet surfers to say no to targeted ads from more than a dozen major Web ad networks, including Google's DoubleClick, Yahoo and its Blue Lithium subsidiary, Microsoft's Atlas advertising unit, and AOL-owned Advertising.com and Tacoda. The system works by placing a cookie--a small text file containing the user's preferences, which in this case, stipulate not to engage the behavioral advertising feature--on the user's hard drive.

But that set-up has its obvious limits. Many antispyware programs, for example, are set up to delete all cookies at regular intervals. And if users opt to clear all of their stored cookies through their Web browser settings, the do-not-track cookie will vanish as well.

Without a better way to get around those shortcomings, "we have...consumers and the FTC and industry agreeing on consumer choice and then no way to technically get there," said Peter Swire, an Ohio State University law professor and a former lead privacy counselor in the Clinton White House.

The discussion was part of a an event here hosted by the Annenberg Schools for Communication at the University of Pennsylvania and the University of Southern California.

In a new animation (screen capture shown here), AOL uses a penguin in an attempt to explain how Web cookies and targeted advertising work.

(Credit: AOL)

Google chief privacy officer Jane Horvath predicted that in the future, there may be a technological solution "that will have a cookie or something that will allow this (opt-out preference) to be a constant," adding, "that would be a very promising direction to go."

AOL Chief Privacy Officer Jules Polonetsky said his company has asked Microsoft to configure its Internet Explorer browser to help "better remember a user's opt-out privacy preference via the cookie." Microsoft has said it will help keep track of those preferences by Windows Live users across multiple computers, but Polonetsky said the company should "do it for everybody."

One thing that doesn't appear as effective as technological solutions, Polonetsky said, is a government-run "do not track" list for Web advertising, akin to the existing "do not call" list for telemarketers.

A broad coalition of consumer and privacy advocates last fall called on the Federal Trade Commission to establish such a registry. The concept is this: Any advertising entity that sets a "persistent" cookie on a user's machine would be required to give the FTC the domain names of servers used to place it. Consumers would then be able to import that list of domain names and block them from tracking their Internet surfing behavior.

Polonetsky said that while he supports the concept, "I think the way to do it isn't a government place where your browser goes and gets stuff."

Instead, the former New York state legislator said, "the rule should be that whatever technology platform you're using should have no-brainer, easy-to-use labels that people know how to toggle to turn on or off the kinds of personalization, storing, whatever it is that that particular platform does."

Privacy advocates at Thursday's discussion weren't sold on the idea of self-regulation alone. Ultimately the responsibility to understand how their information is being used should not fall on consumers, but "on business to protect and safeguard consumers to whom they are providing these products," said Marc Rotenberg, director of the Electronic Privacy Information Center.

"The system is already in place, it's too late to turn it back," said Jeff Chester, director of the Center for Digital Democracy, which advocates for tighter privacy regulations on Internet companies. "We need real policy safeguards. The Congress and the FTC need to act."

FTC Commissioner Pamela Jones Harbour, an Independent, who spoke briefly before the panel discussion began, said her agency is "actively reviewing" about 60 comment submissions from a wide array of industry and nonprofit interests about its proposed online behavioral advertising privacy principles.

"We must approach this issue with a careful balancing," said Harbour, who cast the sole dissenting vote in the FTC's approval last December of the Google-DoubleClick merger, "acknowledging the realities of the changing business models but demanding the model respect the needs of consumers."