Privacy

As the temperatures rise in a typical Washington summer, so grows the pressure on some online advertising firms. 

Yesterday the House Energy and Commerce Committee’s Telecommunications and the Internet Subcommittee held a hearing on the questionable methods for advertising currently being used by some Internet service providers (ISPs).  The hearing was entitled, “What Your Broadband Provider Knows About Your Web Use: Deep Packet Inspection and Communications Laws and Policies.”   Panelists included: Bob Dykes, the CEO for NebuAd, David Reed, an early Internet pioneer and professor at MIT, Alissa Cooper, the Chief Computer Scientist for the Center for Democracy and Technology, Scott Cleland, President of Precursor, LLC, and Bijan Sabet, a General Partner at Spark Capital. 

Yesterday, the Senate Judiciary Committee's Antitrust Subcomittee and the House Judiciary Committee's antitrust task force questioned representatives from Google, Yahoo, and Microsoft about the proposed Google-Yahoo advertising partnership. (Google and Yahoo signed the agreement, which allows Google to assist with Yahoo's targeted ads, on June 12.) Both House and Senate members have expressed concerns about competition and consumer privacy issues. In Tuesday's hearings, they wanted to learn more about the deal by speaking directly with the players involved.

Microsoft attempted to enter into a partnership with Yahoo, but Google ultimately won approval from Yahoo's board. In testimony before the House and Senate Judiciary Committees, Microsoft senior Vice President and general counsel warned that the Google-Yahoo deal would result in Google dominating 90% of the online search advertising market. He said Google currently controls 70% of this market, while Yahoo has 20%.

Released one day before the Senate Commerce Committee held its hearing on the privacy implications of online advertising, a new report says targeted ads may involve practices that violate state and federal wiretap laws.

On Tuesday, the Center for Democracy and Technology (CDT) issued a memo, saying Internet service providers (ISPs) that allow an advertising network to copy [their] customers' Web traffic contents are defying "reasonable consumer expectations and may [be violating] communications privacy laws."

Currently, some ISPs are working with third party advertising agencies, which are copying consumer data in order to target specific ads at users. One such firm, NebuAD, testifed before the Senate Commerce Committee yesterday. NebuAd claims it does not violate any laws because they do not collect personally identifiable information. Some, though, argue that any collection of data can ultimately be tied to an individual and disagree with NebuAd's assertion that privacy is completely protected. CDT's memo says the practice most likely violates legal protections provided in the Electronic Communications Privacy Act.

Today the Senate Commerce, Science, and Transportation Committee held a hearing on privacy concerns related to online advertising. In what will probably be the first of several hearings, the committee asked panelists about their thoughts on privacy threats vis-a-vis online advertising. Chairman Dorgan noted that no Internet Service Providers (ISPs) wanted to participate at today's hearing, but he hoped to address this issue with them at another hearing in the future. Panelists at this well-attended event included Lydia Parnes of the Federal Trade Commission, Chris Kelly of Facebook, Leslie Harris of the Center for Democracy and Technology, Jane Horvath of Google, Robert Dykes of NebuAd, Mike Hintze of Microsoft, and Clyde Wayne Crews of the Competitive Enterprise Institute.

HIGHLIGHTS:

In a letter last month, Congressmen Ed Markey and Joe Barton of the House Energy and Commerce Committee asked that Charter refrain from using technology that would allow the cable company to profile its customers for targeted ads and content. After meeting with the congressmen, Charter announced yesterday it will delay using this technology in order to address privacy concerns.

According to CongressDaily, Markey and Barton argued "that federal law bans firms offering cable services from disclosing subscribers' personal information without prior consent."

In a statement, Charter said they "will continue to take a thoughtful, deliberate approach with the goal to ultimately structure an advertising service that enhances the Internet experience for our customers and addresses questions and concerns they've raised."

Because the issue if not fully resolved, Markey asked that other Internet service providers hold off on using such technology while privacy concerns remain.

(source: CongressDaily)