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In recent months, the battle over online privacy and data collection has raged. Marketers cherish this data as a critical part of their advertising strategy while consumers and regulators consider the practice of data collection an invasion of privacy.  The Interactive Advertising Bureau (IAB) and the Network Advertising Initiative (NAI) released a solution in response to the FTC’s mandate requiring self-regulation within the industry to alert consumers when they are served an ad using targeting based on data collection.  These ads now contain an “ad-choice icon”  (right) that is clickable to an educational site on data collection and behavioral targeting and allows the user the option to opt out of ads served by that company or network.

In addition to The IAB “ad choice” icon, individual browsers are throwing their hat into the privacy ring as well.  Microsoft and Mozilla have announced that the newest version of their browsers will include a “do-not-track” option that allows users to opt out of all data collection.  Google has not announced this feature for Chrome.   While opt-outs at the browser level would seemingly allow for a one-stop solution for opt-outs, individual data companies must agree to abide by the “do-not-track” request before a user is exempt from data collection.  To date, none of these companies have publically agreed to comply.

While the IAB and NAI are attempting to create a bottom-up solution for privacy that places responsibility on advertisers and service providers, there is still the looming possibility of government mandates concerning online privacy.  John McCain and John Kerry have proposed legislation expected to reach Congress this month that would create an “online privacy bill of rights” that would go beyond individual agency self-regulation.  The bill would require user’s permission to share data as opposed to having users manually opt-out of targeting and data collection.

While Washington is in discussions with industry veterans such as Jules Polonetsky (formerly of AOL and DoubleClick) to fill the newly created role of Deputy Chief Technology officer, having the government pass legislation for an industry that is complex and constantly evolving seems futile.  Data collection and audience targeting is a complex system that should not be treated as simple practice that can be governed by a blanket of legislation that treats all data collection equally.  According to a study by The Center for Media Design, users do not view all personal data as off-limits, but instead, view data protection as a sliding scale.   Participants in the study were okay sharing data such as gender, birth date, leisure activities, and occupation, while information such as credit card, social security numbers, sexual and mental health and financial records were viewed as strictly off-limits.  Government legislation would limit data collection across all levels of this user comfort scale and eliminate much of what makes user experience online more convenient and customized.  While wide range opt outs would prevent data collection of sensitive topics, it would also eliminate practical functions such as username and password reminders or advertisements that are relevant to a user’s preferences. The process of data collection should not be viewed or regulated as a single entity.  The solution to online privacy will require deeper insight into what data users are concerned about protecting while still maintaining the customization and ease that users have come to expect from the internet.