Update of prior presentations following third FTC Roundtable.

1. Update on the FTC Roundtables
and Congressional Action
March 18, 2010
WE KNOW THE INTERNET

2. The Past is Prologue

3. 1999
♦ FTC Conference on Online Profiling
♦ OECD Consumer Protection Guidelines
♦ Network Advertising Initiative
2000
♦ FTC Report to Congress
1999-2000
1999 2000 2001 2002 2004 2006 2007 2008 2009 2010

4. A Call for Regulation
• Commends NAI but . . .
• [Recommends] legislation that would set forth a basic level of privacy
protection for all visitors to consumer-oriented commercial Web sites with
respect to profiling.
– Basic standards of practice governing the collection and use of information
online for profiling, and provide an implementing agency with the authority to
promulgate more detailed standards
– [Including] authority to grant safe harbors to self-regulatory principles which
self-
effectively implement the standards of fair information practices articulated in
the legislation and subsequent rulemaking.

5. 2001
♦ FTC Conference on Consumer Data
♦ NAI adopts opt-out cookie
♦ New Chairman Muris – legislation “premature”
2002
♦ “Dewey the Turtle”
2001-2005
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

6. Behavioral Targeting

7. Seattle Beacon March 18, 2010 PAGE TWO
34!
SEATTLE’S SOGGY SODS
CITY BREAKS RECORD FOR
CONSECUTIVE RAINY DAYS
SEATTLE. Forget Spain, the rain falls mainly
in Seattle as the Emerald City “enjoyed” its
34th consecutive day of rain breaking the
1953 record. Sonny Smith, President of the
Visitors and Convention Bureau was quick to
point out that even with the record, the city
still gets far less total rain than cities such as
We got plenty Miami. In fact, Seattle is not even among
in Palm Springs the top 101 cities for total rainfall. So
remember, it could be worse – you could be
www.sunsunsun.com in Miami.

8. Seattle Beacon March 18, 2010 PAGE TWO
12TH Annual
Chainsaw Juggling
Convention 34!
SEATTLE’S SOGGY SODS
CITY BREAKS RECORD FOR
CONSECUTIVE RAINY DAYS
SEATTLE. Forget Spain, the rain falls mainly
in Seattle as the Emerald City “enjoyed” its
34th consecutive day of rain breaking the
1953 record. Sonny Smith, President of the
Visitors and Convention Bureau was quick to
point out that even with the record, the city
still gets far less total rain than cities such as
FRIDAY MARCH 19TH Miami. In fact, Seattle is not even among
KING COUNTY HOSPITAL & the top 101 cities for total rainfall. So
CONVENTION CENTER remember, it could be worse – you could be
in Miami.

9. By the Numbers
45
$44.0
Increased Click-through rates
40
35 670% to 1000%
30
25
20
$17.0 Increased Conversions
15 $7.8
10 $0.2
400 to 900%
5 10.7 14.2 16.8
0
2005
BUT . . . 66% of consumers do not
2008
2010
2012
want websites they visit “to show you
ads that are tailored to your interests
Pct of Display Ads US Ad Spending ($100MM)

10. Renewed Focus on BT

11. 2006
♦ CDD Files FTC Complaint Attacking BT
2007
♦ Merger Mania
♦ ehavioral Advertising Workshop
2006-2007 ♦ CDD “Do Not Track” Proposal
♦ FTC Proposes BT Self-Regulatory Guidelines
♦ Facebook’s Beacon Program
2006 2007 2007 2007 2007 2007 2007 2008 2009 2010

12. 2008
♦ Industry Pushback on Self Regulatory Principles
♦ NAI Updates Principles
♦ NebuAd and BT 2.0 Blow up on Capitol Hill
♦ FTC Workshop on Mobile Marketplace
2008
2008 2008 2008 2008 2008 2008 2008 2008 2008 2009

13. JAN-AUG 2009
♦ FTC Releases Revised BT Guidelines
♦ Leibowitz Repeated Warnings to Industry
♦ House hearings, explore BT
♦ IAB, DMA, AAAA Release BT Guidelines
2009
JAN FEB MAR JUNE JULY SEPT NOV DEC DEC DEC

14. FTC’s Revised Proposed
Self-Regulatory Guidelines (2009)
Every website where data is collected for behavioral advertising should
provide a clear, concise, consumer-friendly, and prominent statement that
data about consumers’ activities online is being collected at the site for use in
providing advertising about products and services tailored to individual
consumers’ interests, and
consumers can choose whether or not to have their information collected for
such purpose.
Reasonable Security, and Limited Data Retention, for Consumer Data
Affirmative Express Consent for Material Changes to Existing Privacy
Affirmative Express Consent to (or Prohibition Against)
Using Sensitive Data for Behavioral Advertising

15. SEPT - DEC 2009
♦ FTC Announces Roundtable
♦ Privacy Wars
♦ Facebook Revised Privacy Policy
♦ FTC Panel on Newspaper Industry
♦ FTC/OECD Conf. on 10th Anniv. Of Guidelines
♦ First FTC Roundtable
2009
JAN FEB MAR JUNE JULY SEPT NOV DEC DEC DEC

16. Industry Self Regulatory Principles
Education
Transparency
Consumer Control
Data Security
Material Changes
Sensitive Data
Accountability

19. Round One
December 7th, 2009
Washington, D.C.

20. FTC Chairman Leibowitz
• We're at another watershed moment in privacy,
and the time is right for the commission ... to take
a broader look at privacy . . . Our minds are
open.
• We all agree that consumers don't read privacy
policies, or EULAs for that matter. I've been a
supporter of opt-in for quite some time.
opt- time.

21. FTC Commissioner
Commissioner Jones-Harbour
I believe action has not been a high
enough priority to date. [The] United
States needs comprehensive privacy
legislation. If we continue the piecemeal
approach to privacy in this country, we
merely push aside the underlying issues.
Industry attempts to provide notice and
choice to consumers have been
insufficient thus far.
We have strayed far from the Fair
Information Practices that should serve as
a baseline for any comprehensive privacy
legislation.

22. Shift in Focus – Use not Collection
` We are taking a look at a
number of technologies and
business practices—
including social networks,
cloud computing, mobile,
data broker relationships,
and behavioral
advertising—and will assess
Christopher Olsen both the benefits and risks of
Asst. Director - Division of
Privacy and Identity Protection those practices.

23. 2010
♦ Edith Ramirez and Julie Brill Confirmed
♦ Google Buzz and Facebook Investigations
♦ Netflix Settlement
♦ Second and Third Roundtable
♦ Waiting for Godot Stearns
2009
2009 2010 2010 2010 2010 2010 2010 2010 2010 2010

24. Round Two
January 28, 2010
UC Berkeley School of Law
Berkeley, California

25. Vladek Warns of Enforcement Actions
Consumers don’t understand
commercial information-collection
practices (ex: data brokers,
behavioral targeting).
Lengthy policies are not effective;
and
FTC is preparing to launch
enforcement actions against
David Vladek companies engaged in “practices
Director, Bureau of Consumer Protection that undermine the tools that
consumers can use to opt out of
behavioral advertising.”

26. Round Three
March 17, 2010
Washington, D.C.

27. “Irresponsible Practices”
Commissioner Jones-Harbour
Jones-
Google’s Buzz and Facebook Privacy Policy change “irresponsible”.
Concerned that “technology companies are learning harmful lessons from
each other’s attempts to push the privacy envelope. continue to launch
products where their guiding privacy principle appears to be, ‘Throw it
against the wall, see if it sticks – and if not, we can always pull it back.’
Deeds speak louder than words, and this is turning into a dangerous game
of ‘copycat’ behavior. And unlike a lot of tech products, consumer privacy
cannot be run in beta.”
Calls for FTC to adopt position of intolerance towards such behavior.
SSL security should be default standard in cloud computing.

28. What’s Next?
David Vladek Chairman Leibowitz
FTC not certain where it will “I have a sense, and it’s still
go and plans to "sit back" and amorphous, that we might head
think about the detailed record toward opt-in.”
before making public a set of
detailed recommendations by June
or July.
CONGRESS
???

29. New Commissioner Julie Brill
Senior Deputy Attorney General and
Chief of Consumer Protection and
Antitrust for the North Carolina
Department of Justice
Co-chair of the National Association
of Attorneys General Privacy Working
Group and Fair Credit
Assistant Attorney General – Vermont

30. Congressional Limbo
March 13, 2009: Privacy bill a top
priority
May 6, 2009: Working on draft privacy
bill.
October 1, 2009: “Privacy legislation
affecting the online advertising industry
Rep. Rick Boucher (D-Va)
Chairman House Energy and could be submitted by November . . .
Commerce Committee’s [a]ccording to statements made recently
Subcommittee on Technology
and the Internet. by Rep. Rick Boucher.”
January 28, 2010: Boucher "very close"
to finishing a discussion draft of the
legislation.

31. Internet Law Center
100 Wilshire Blvd., Suite 950
Santa Monica, CA 90401
www.internetlawcenter.net
Bennet Kelley
(310) 452-0401
bkelley@internetlawcenter.net
WE KNOW THE INTERNET

32. Appendix
♦ Consumer Data Ecosphere Slides
♦ About the Internet Law Center
♦ About Bennet Kelley

33. Consumer Data Ecosphere

41. About the Internet Law Center
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42. About Bennet Kelley
Bennet is one of the nation’s leading Internet attorneys and
founder of the Internet Law Center. He is Co-Chair of the
California Bar Cyberspace Committee and a frequent speaker
on the latest developments in Internet law at conferences
throughout North America. Bennet also is a regular guest on
Webmaster Radio’s “InBoxed”.
Bennet has played a leading role in shaping Internet law and
policy having testified and lobbied on Internet issues in
Washington and Sacramento, winning praise from a key
Congressional committee for his contributions to federal
spyware legislation.
In addition, the Internet Law Center’s bi-weekly newsletter,
Cyber Report, was named one of the top 100 Internet law
resources and recognized by the LA Press Club.