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No Likely Reprieve to Kids’ Privacy Changes

WASHINGTON — Online advertisers, content distributors and privacy advocates squared off last week over when the Federal Trade Commission should make changes to its Children’s Online Privacy Protection Rules, and by week’s end it was looking unlikely that industry players would get their desired reprieve.

In December, the FTC unveiled the final version of its proposed changes and updates, which include bringing geolocation, cookies (plug-ins) and behavioral targeting explicitly within the rules and making website owners responsible for third-party collections.

The Interactive Advertising Bureau, Digital Marketing Association, Motion Picture Association of America and others last week asked the FTC to delay implementation from July 1 to Jan. 1, 2014.

In their letter, the group argued the delay was needed because the changes — particularly making first parties liable for any third-party data collection that benefits them — would “significantly impact the longstanding business model these companies have relied upon in planning the capabilities of their products and services since COPPA’s inception.” It said the companies needed more time to “absorb the impact” of the changes and implement them.

The letter also said it would have helped if the FTC had released its promised frequently asked questions on the changes, which it did only a day later. The FAQs indicated the July 1 date remained in place.

Privacy advocates immediately pushed back. In their own letter, the Center for Digital Democracy (CDD), Children Now, Common Sense Media, Consumers Union and more than a dozen groups said the commission should not push back the July timetable.

Pointing to new FTC chairwoman Edith Ramirez’s October 2012 speech, they wrote: “You observed that the more that industry protests the proposed changes to the COPPA rule to explicitly prohibit online behavioral advertising to children, ‘the more it raises questions about industry’s] claimed intention not to target children.’ In the present instance, similarly, the more industry seeks to delay the implementation of rules, the more it raises questions about industry’s intent to comply.”

The FTC is updating enforcement of the rules that administer the act to square them with changes in digital marketing practices since the law was passed in 1998 — before the advent of Google, Twitter, Facebook and smartphones.

The CDD’s and IAB’s letters came the day before Sen. Jay Rockefeller (D-W.Va.), who was in attendance and in support of the changes when they were announced at a press conference last year, held a hearing on voluntary do-not-track efforts in which he hammered online advertisers.

He said the ad industry was purposely dragging its feet on implementing a voluntary do-not-track regime and he did not trust it to put consumer welfare first if that stood in the way of their business model.

Luigi Mastria, managing director of the Digital Advertising Alliance, countered that its members — representing more than 90% of the online ad ecosystem — were providing consumers the choice to opt out of “relevant ads” and data collection through its online icon system, and that almost 2 million users had exercised that option.

But he said that a browser-based system was hung up by the lack of a standard definition of tracking and by technical issues with Microsoft and Mozilla’s respective efforts to make do-not-track a default and to test-block cookies.

Rockefeller did not appear to be assuaged.

TAKEAWAY

It looks like the online ad industry won’t get the extra time it wants to comply with the FTC’s new kids’ privacy rules.