WASHINGTON, DC — A Federal Trade Commission report released Thursday indicates the governmental consumer-protection agency is willing to take official steps to force the internet industry to safeguard users’ privacy if industry members don’t clean up their acts on their own — and soon.Unless internet industry insiders take immediate steps to clarify their policies and procedures, the FTC is willing to promulgate regulations governing privacy policies and terms of use. Alternatively, the agency may ask Congress to codify some rules.

Chief among the FTC’s concerns: the collection and sharing of information that is used to serve online ads. In commissioners’ view, virtual advertisers and publishers are playing fast and loose with consumers’ expectations about their personal data.

“[Advertisers and publishers] were worried that the commission would abandon its support for self-regulation,” Jules Polonetsky, the co-chairman of the industry association Future of Privacy Forum, told The New York Times. “The commission is saying, ‘You have one last chance before I come upstairs and take your toys away.’”

The commission’s report comprised an update to its principles for behavioral advertising, first released in 2007. The principles are voluntary guidelines, but apparently the industry has not been voluntarily adhering to them in any meaningful way.

The updates include a directive that websites must collect and use data “in a clear, concise, consumer-friendly and prominent” way. Commissioners believe few websites accomplish that currently.

“What we observe is that, with rare exception, it is not the rule for any websites to do those things,” Eileen Harrington, acting director of the FTC’s bureau of consumer protection, told the Times. “It is far more commonplace for them to put the information in the midst of lengthy and hard-to-understand privacy policies.”

Without being specific about techniques, Harrington suggested websites separate their behavioral-targeting explanations from their privacy policies.

“This is about advertising, so these people ought to be creative,” she said.
“We know advertisers can get their messages across when they want to. They darn better want to get this message across: ‘This is what we are collecting and this is how we are using it.’”

Two commissioners — one independent and one Democrat — said they favor regulation and legislation immediately.

“With this Congress, there is not going to be a lot of patience for Big Brother internet advertising without privacy protections,” Democrat Jon Leibowitz noted in a prepared statement. “They invite legislation if they don’t do a good job at self-regulation.”

Some consumer watchdog groups don’t think the FTC went far enough in Thursday’s report.

“These are baby steps for privacy, at best,” Jeff Chester, the director of the Center for Digital Democracy, told the Times.