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FTC Proposal Would Wreck the Economy: DMA's Woolley

4/10/12

By Ken Magill

Far from just threatening online advertising and commercial email, the Federal Trade Commission’s current position on a universal do-not-track mechanism poses a grave threat to the entire U.S. economy, according to Linda Woolley, executive vice president of government affairs for the Direct Marketing Association.

The FTC last month released a privacy report in which it called for the implementation of a do-not-track mechanism that would opt consumers out of any unnecessary data collection regardless of the channel.

“[A]n effective Do Not Track system should go beyond simply opting consumers out of receiving targeted advertisements; it should opt them out of collection of behavioral data for all purposes other than those that would be consistent with the context of the interaction,” the FTC said in its report.

And with that one sentence, the FTC broadened the do-not-track debate from online behaviorally targeted advertising to all information-based marketing and advertising.

“The entire economy is based on information,” Woolley said. “It doesn’t matter whether you’re sending someone an email, or sending someone a targeted ad, or whether I check into Hilton hotel and the desk clerk says to me: ‘Mrs. Woolley, thank you for staying with us again. We’re so happy to see you,’ instead of: ‘Hi Mrs. Woolley. Have you ever stayed with us before?”

Woolley also took issue with this newsletter’s assertion last week that the email industry has been largely silent on the issue.

That the DMA is leading the charge against the FTC’s do-not-collect proposal means that by definition, commercial email’s interests are represented, she said, adding she meets with officials on a daily basis.

“Email is part of what we do,” she said. “Did we specifically say: ‘Wow. This is going to adversely affect the email marketing industry?’ No. Because it will adversely affect everybody.

“We have been all over this issue of universal suppression, which in their [the FTC commissioners’] minds translates into do not collect,” Woolley said. “We have been all over the fact that it not only destroys the Internet economy, it destroys the entire economy writ large.”

When asked what individual businesses should do to help prevent the FTC from forcing the establishment of a universal do-not-collect mechanism, Woolley said: “Every single company that uses consumer data can say: ‘This universal do-not-collect proposal out of the FTC is madness. This is not like giving consumers notice and choice on behaviorally targeted ads. This is not like giving consumers notice and choice on direct-mail pieces. Taking information out of the information economy is madness, and we should not allow this to happen.’”

She urged business executives to contact their congressional representatives and explain how important consumer data is to their companies’ bottom lines.

Letters to the editor are also a good idea, she said.

“Anything anybody can do,” she said. “The more the merrier.”

Woolley said nothing is going to happen on the legislative privacy front between now and the next election, but once the election is over, the threat of universal do-not-collect regulations will loom again.

So how did do-not-track morph into do-not-collect in the first place?

“What happens with these ideas is somebody wrote the FTC and said something, the media picks it up, people on Capitol Hill start talking about it and it gets spun up,” Woolley said. “Something might not happen now, but in a year, something very well might happen.

“A do-not-collect proposal is a bridge too far and it will really wreck the economy,” she said.

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Terms: Feel free to be as big a jerk as you want, but don't attack anyone other than me personally. And don't criticize people or companies other than me anonymously. Got something crappy to say? Say it under your real name. Anonymous potshots and personal attacks aimed at me, however, are fine.

Posted by: Charles P
Date: 2012-04-11 22:14:11
Subject: Do-not-track

The FTC proposal would end up prohibiting businesses from tracking the kinds of people who come into their stores, for what purpose, what they buy, and when. This will make the product order and stocking processes in grocery stores much more difficult, resulting in inflation in the grocery business, and possibly a reduction in the number of products offered. This provision is not a privacy proposal. It is a European data protection proposal and inevitably will bring either a massive bureaucracy and the trial bar along in its wake. The FTC should think more about evolution and less about revolution.
Posted by: dave c
Date: 2012-04-11 13:07:29
Subject: do not.collect?

N, this rule would make it.illegal for a restaurant to write down your preferences without having you sign an opt in. Nobody would be free to collect ANY customer info, and trial lawyers would have a field day. On the other hand, would it be workable to outlaw the sale of said data? I believe what people find alarming is that marketers are trading so.much info that they can easily construct a detailed profile of a consumer containing far more data than anyone would volunteer.
Posted by: N
Date: 2012-04-10 22:48:56
Subject: Opt In

I still need to read the bill but what's wrong with a law that finally requires opt in? In other words you can target based on data that people voluntarily give you. You cannot target based on information you collect from the way people behave. This benefits all legitimate email media companies. It hurts web media companies, which I could care less about since many of them are indeed evil.

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