FTC Asked to Stop Microsoft's AdCenter

UPDATE November 2, 2006, 8:45 pm ET: Thursday evening, Microsoft's senior attorney for privacy, Mike Hintze, provided this comment to BetaNews on the Center for Digital Democracy's petition to the FTC:

"We welcome the opportunity for a discussion about innovations in online advertising and how Microsoft’s adCenter works in a way that protects consumers’ privacy. Consumer trust is essential to the success of online business, and helping protect consumers’ privacy is a top priority for Microsoft in our development and implementation of online services. We are very open about our privacy policies and practices across all of our online services and advertising products because we believe that providing consumers with this type of transparency and control is extremely important, and it will continue to be a central focus of how we design and deliver online services both now and in the future.”

Microsoft's privacy policy was cited at length -- three pages, in fact -- by the petition, which actually criticized it for its length, saying few users would ever be expected to read something that long, nor to understand it afterward. It didn't go on to speak for the readers of 50-page petitions.

A pair of consumer advocacy groups yesterday petitioned the US Federal Trade Commission for "injunctive relief" - in effect, for an order to stop Microsoft from developing technology for its AdCenter online advertising platform, that they claim invades the privacy of unsuspecting users who don't understand how their online behavior would be tracked.

While the petition, filed yesterday by the Center for Digital Democracy and the US Public Interest Research Group (PDF available here), makes reference to other companies that track user behavior -- such as Google and Yahoo -- as well as developers of software that enable consumer Web sites to track behavior, Microsoft is featured most prominently by far, almost as the poster boy for "Big Brother."

A mylange of scheming technologies such as Web analytics and behavioral targeting, along with industry trends such as mergers and acquisitions, the petition claims, have coagulated to form "the foundations of an entirely new online environment, one in which engagement gives way to entrapment, in which personalization impinges on privacy. It is an online environment, in short, that threatens to turn the traditional media equation on its head - a media that consumes us."

"No other company displays these unfortunate traits more aggressively than Microsoft," the petition goes on, "and thus we respectfully request the commission to examine closely all facets of Microsoft's new approach to data collection via its Digital Advertising Solutions/adCenter marketing apparatus."

Everyday users, the industry groups contend, are generally unaware of the amount of behavioral investigations that Web sites conduct, and may thus be unaware of how their privacy may be invaded. For one non-Microsoft example, the petition cites a service offered by marketing technologies firm JumpTap, which keeps track of media purchases consumers make through their cell phones, and by way of alliances through carriers, make recommendations to customers about what they might like to purchase next.

Quoting JumpTap's promotional literature, the petition states the company's Recommendation Engine can present "targeted ads and content to mobile users at the precise moment those users express an interest in specific goods and services. The mechanism for connecting to this audience is a sponsored link."

Such sponsored links, the petition argues, are "routine invasions" of users' personal freedoms. "Missing in this new system of scrutiny," the authors write, "is the ability simply to browse anonymously, to window-shop, as it were, replicating online the right we've long enjoyed in real-world stores ('Just looking, thanks') - the right to be left alone."

The petition omits mention of tactics of salespeople in retail settings, who for decades have been trained to observe shoppers' behavior, even when -- or especially when -- they're wandering around. Retailers collect information from their customers every day in order to communicate better with those customers and to close a sale, and the very existence of shopping malls stands as proof that many customers prefer to conduct transactions in places where their privacy cannot possibly be guaranteed.

But also omitted from the citation -- 44 pages of which are devoted to citations from marketing brochures and Web sites, as well as Microsoft's privacy policy -- is any direct connection between the concept of collecting any user's behavior data, and that of gleaning from that data any personal information about that user to which a retailer or other service might not otherwise be entitled were he or she to enter that service's own physical retail storefront.

While personal identifying information is arguably every customer's private property, no laws currently exist restricting the rights of retailers to observe how customers observe, test, purchase, or reject their merchandise.

At one point, the petition quotes the chairman of the Web Analytics Association, Brian Eisenberg, as saying, "Compared to other ad media, the Internet delivers more data about who our customers are and what they actually do, and does so more specifically and quickly than we ever dreamed possible. Combine such data with the context of site content or a specific ad campaign, and you see accurate snapshots of customer behavior patterns that can be observed, tracked, and measured. The end result is a set of personas and persona groups that embody the entirety of the customer base."

This citation is then used against Eisenberg and the methods he advocates. "Unfortunately," it reads, "the end result is also an online environment that poses grave risks to consumers, who are simply unaware that their every move online is being monitored and assessed."

What FTC commissioners may consider during meetings scheduled for next week is whether analytical snapshots of customers or consumers en masse by definition reveal anything about individual members of those sets that may violate their personal privacy. Commissioners are being asked to connect the dots: from analytics, to personal privacy, to Microsoft.

Such connections may exist, though it may be difficult for them to detect it based on this petition alone. Its authors may want to monitor them, perhaps using closed-circuit cameras, to detect in advance whether they're making any progress.

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