Publishings

Children’s Privacy Advocates Praise Federal Trade Commission on Proposed New Safeguards to Protect Children’s Privacy Online Leaders of the Effort that Helped Pass COPPA in 1998 Say Parents Will Now Have Better Ways to Ensure Their Children’s Information is Safe in the Smart Phone and Social Networking Era Washington, DC: Today, the FTC released a Notice of Proposed Rulemaking on its rules implementing the Children’s Online Privacy Protection Act (COPPA), the 1998 law designed to protect the privacy of children under 13. The Commission’s plan would help safeguard children’s data when they are on a mobile phone, playing an interactive game on the Internet, or participating in a virtual world. Under the proposed new rules, children could not be tracked and profiled when online through the use of behavioral targeting and other techniques now regularly used to stealthily collect information on Internet and mobile phone users. Parents and children’s security and safety would be better protected, since the proposed COPPA rules would cover a child’s geo-location data, as well as photos they post online, and would impose new requirements to ensure against data breaches. “Since its passage in 1998, COPPA has served as an important safeguard for young consumers under the age of 13 in the online marketing environment,” commented Kathryn Montgomery, PhD, Professor of Communication at American University, and one of the leaders of the campaign that led to passage of the law. “It established a level playing field by creating a law that applied to every commercial player—from the largest children’s media companies to the smallest start-ups. And it sent a strong signal to the online marketing industry: If you are going to do business with our nation’s children, you will have to follow some basic rules. COPPA was purposely designed to adapt to changes in both technology and business practices. The proposed rules announced by the FTC today reflect careful research and analysis, as well as widespread consultation with major stakeholders. We believe they will help address a number of concerns raised by consumer groups, privacy experts, and child advocates, while at the same time, balancing children’s ability to be active participants in digital culture with the need to protect them from unfair data collection and marketing practices.” Montgomery concurred with the Commission’s recognition that teens also need some privacy protections online. “While some of the mechanisms for protecting younger children are not appropriate for older youth,” she noted, “adolescents are entitled to fair information practices in the digital marketplace. We urge the FTC to address this issue in its forthcoming new comprehensive privacy framework report.” “The Center for Digital for Democracy is pleased that the FTC has finally brought protecting a child’s privacy into the 21st Century,” explained CDD’s executive director, Jeff Chester. “This proposal balances the need to protect the privacy of children, ensure parental involvement, and promotes the growth of kid-oriented online media. At a time when our children spend much of their daily lives online and are always connected to the Internet via games, cell phones and other devices, parents should thank the FTC for acting responsibly on behalf of children.” Among the provisions highlighted by the advocates are: § Extension of privacy protections to the expanding array of digital platforms and marketing venues used to reach and engage young people, including mobile phones and internet-enabled gaming. § The rules’ acknowledgement of increasingly sophisticated technologies for identifying individuals, including IP addresses and geo-location. § Closing of loopholes that made it possible for companies to engage in behavioral targeting and one-to-one marketing aimed at children. § More user-friendly privacy notices to enable parents to make better decisions about their children’s use of online services. “The Institute for Public Representation, which has served as counsel to children’s advocacy groups in efforts to protect children’s online privacy for over sixteen years, is pleased that the FTC is proposing to update its rules to cover new technologies and practices,” said IPR Co-Director and Georgetown University Law Professor, Angela Campbell. The Institute for Public Representation, at Georgetown University Law Center, represented a broad coalition of groups in this FTC proceeding. They included the Center for Digital Democracy, the American Academy of Child and Adolescent Psychiatry, the American Academy of Pediatrics, the Benton Foundation, Berkeley Media Studies Group, the Campaign for a Commercial-Free Childhood, the Center for Science in the Public Interest, Children Now, Consumer Action, Consumer Federation of America, Consumers Union, Consumer Watchdog, National Consumers League, Public Health Institute, U.S. PIRG, and World Privacy Forum. The Children’s Online Privacy Protection Act was passed in 1998 as bi-partisan legislation that had the support of children’s advocates, public health, education, consumer, and privacy groups, as well as leading online marketing companies.

CDD, U.S. PIRG, Consumer Watchdog, and World Privacy Forum call on the Federal Trade Commission to investigate interactive marketing of pharmaceutical and health products and services to consumers and health professionals. Action is required to protect consumers, including their privacy, in the online health and medical marketplace. The FTC has a role to play to help the Food and Drug Administration address new threats. Read the press release below for details…

For the past 25 years, pharmaceutical companies have been permitted to market their products directly to consumers. More recently, in the years following the Food and Drug Administration’s relaxation of direct-to-consumer (DTC) advertising guidelines in 1997, spending on such promotion grew more than six-fold, reaching $5 billion by 2008. In the traditional media of print and broadcast, those DTC ads come with lots of fine print, including warnings of possible side effects that most consumers. But now that ever-increasing amounts of pharmaceutical marketing have moved online, there is another kind of fine print—the truth about invasive and potentially misleading pharmaceutical advertising—that consumers may never see at all. The Center for Digital Democracy recently shared these concerns in a formal filing to the FDA, the highlights of which follow: 1. Personal Data Collection and Privacy Online pharmaceutical and health marketing companies have developed an extensive data collection and interactive targeting apparatus. Few U.S. health consumers are aware that they are being identified, labeled, profiled, and tracked on the Internet while they search or access information on specific conditions or concerns. 2. “Condition” and Behavioral Targeted Advertising Behavioral targeting enables health marketers to stealthily follow consumers online—sometimes across many different websites—gathering details on their interests and activities, and then offering them marketing messages precisely honed to their behaviors related to an illness or condition. Digital marketers employ online “ad networks” to help track and then target individual consumers seeking health-related information. There are also a number of specialized health portals and networks specifically created to target consumers based on particular conditions or concerns. 3. Neuromarketing It should perhaps come as no surprise that many of the companies whose products are rooted in scientific research have turned to neuroscientific techniques in an effort to influence health consumers’ subconscious decision-making processes. Called “neuromarketing,” such techniques are increasingly employed to research, design, and implement online advertising campaigns—including those for health and medical products. NeuroFocus, for example, a firm that specializes in the application of brainwave research to advertising, programming, and messaging, uses “neurological testing [that] delves down to the subconscious mind,” far below such “corrupting factors” as education, language, and cultural variances. Measuring as many as 64-128 sectors of the brain at 2,000 times per second, NeuroFocus promises results that are “unambiguous, accurate, and actionable”—results, we should add, that are achieved without the consumer’s knowledge or consent. 4. Social Media Monitoring and Marketing Perhaps most alarmingly, marketers have developed applications that allow companies to eavesdrop and analyze conversations by and among health consumers, taking advantage of users’ networks of friends to orchestrate peer-to-peer brand promotion. These new surveillance tools monitor conversations among social network users to identify what is being said about a particular issue or product. Marketers then work to insert brand-related messages into the social dialogue, often by identifying and targeting individuals considered brand “loyalists” or “influencers,” and encouraging them to generate buzz through their networks of friends. Increasingly, advertisers are using Facebook’s marketing apparatus—which is largely invisible to its users—to develop a brand presence on its pages so companies can strongly connect to the social communications of a very large pool of consumers. Heartbeat Digital’s BuzzScape, for example “allows clients to monitor discussions that flow in and out of the tens of thousands of message boards, forums, blogs and social networks that increasingly dominate the online environment.” As Heartbeat CEO Bill Drummy admits, “In a sense, we eavesdrop on public conversations among people with a shared interest, then use what we learn to create interactive marketing campaigns that address the identified needs, wants and gaps in knowledge of target audiences.” Perhaps the biggest gap in audience knowledge, of course, is awareness of the fact that online conversations concerning the most sensitive health concerns have become just so much grist for the pharmaceutical marketing mills. 5. Unbranded Sites Another common practice among pharmaceutical companies is the use of online video and websites to raise the awareness of a particular disease or condition—often without clear disclosure of sponsor relationships. Ostensibly designed as educational sites, where individuals can share their experiences with various treatments for certain maladies, sites such as LivingWithEpilepsy.com or ParkinsonsHealth.com are also useful to pharmaceutical companies as a “soft sell” opportunity, free of FDA-mandated risk-disclosure and other advertising requirements. 6. Ad Exchanges These commercial arrangements allow companies to auction off individual users to specific advertisers in real time for ad targeting. Increasingly, the targeting is accompanied by so-called “data optimization,” which draws on various information resources to compile more complete profiles of individual users. For example, Google/DoubleClick’s Ad Exchange Health focus has 36 categories, from Arthritis and Diabetes to Respiratory Conditions and Sleep Disorders. Another advertising network, ADSDAQ, offers 50 health-related categories, from A.D.D. and Alzheimer’s Disease to Weight Loss and Women’s Health. Again, consumers are never apprised of the way their personal data—including intimate health-related information—is being sold to the highest bidder. 7. Audience Segmentation The division of consumers into much smaller affinity groups (e.g., Business Travelers, Sports Fans, Technophiles) for the purpose of targeted marketing is a longstanding advertising practice. Its use by pharmaceutical marketers, however, especially in the digital context, raises a number of critical issues. The segments into which pharmaceutical companies divide their audiences go far beyond demographic and lifestyle categories to include highly personal and sensitive information relating to one’s health. For example, as Mark Miller, senior vice president for healthcare marketer Epsilon, explains, “Segment profiling dimensions include (but are not limited to): market size, geo-demographic characteristics, medication usage, self-care behaviors, bio-metrics, insurance coverage/ usage, needs/attitudes/behaviors and media consumption.” The goal of these data collection and analysis efforts, moreover, is to influence consumer behavior in some of the most personal and profound decisions they will ever have to make, concerning their own and their family’s health. 8. Mobile Campaigns Many of the same consumer data collection, profiling, and behavioral targeting techniques that have raised concerns in the more “traditional” online world have now been brought into the mobile phone marketplace. As U.S. consumers increasingly rely on their mobile devices for a wide range of services, including sensitive transactions related to health, the expansion of behavioral targeting into the mobile world (where it will be combined with precise user and location data) is especially troubling. “Not only does Mobile have a ubiquitous presence—with us 24/7,” boasts Peter Nalen, CEO of Compass Healthcare Communications, “—it can also reach more people, more efficiently, and with greater targetability.” That’s not the kind of personalized service, however, that consumers may want or need in the healthcare arena. And that’s why CDD has called upon the FDA to remedy this situation, first by conducting a comprehensive investigation into the use and impact of digital-health marketing techniques and technologies, and then by working with the Federal Trade Commission and other appropriate agencies to develop a set of policies for regulating the use of behavioral targeting, data collection, and other digital techniques in the marketing of drugs and health-related products.

Bush FTC Nominee a Triple Threat: To Media Diversity, Affordable Gas Prices, and Role of States Supporter of Plan to Remove FTC from Media Merger Review to Be Head of FTC Wyden, Boxer and Consumer Groups Express Concern 3 June 2004 Deborah Majoras, a former Bush administration Department of Justice official, who supervised the controversial settlement with Microsoft, is on track to become the chair of the Federal Trade Commission. Majoras, who represents some of the country’s largest oil and media companies, would become the federal government’s lead “consumer advocate.” But as Senators Wyden and Boxer and a number of consumer groups have made clear, Majoras at the FTC would be bad for consumers, competitors, and citizens alike. One major objection to Majoras is her stance on the role that the FTC should play in reviewing media mergers. She backed a secret plan developed by the Bush Administration in 2002 that would have removed the FTC from reviewing such mergers. Under the proposal, only the Department of Justice would have had media merger authority. DOJ has been notoriously friendly to the big media companies that lobby an administration (regardless of which party is in charge). Only at the FTC have consumers and competitors been given serious attention (as in the case of AOL and Time Warner, where the FTC imposed some “open access” and non-discrimination safeguards). As chair of the FTC, Majoras would be unlikely to seek review of media mergers, permitting the DOJ to rubberstamp even more consolidation. While at DOJ, Majoras also led the Bush administration’s backroom deal that approved a much-criticized agreement with Microsoft. The Majoras plan essentially left the computer giant intact, and cut off the crucial rule of the states in imposing more significant safeguards. Finally, Majoras has represented Chevron-Texaco and other major oil and gas interests, an area that the FTC is supposed to regulate. Senators Barbara Boxer (D-CA) and Ron Wyden (D-Or) have placed a “hold” on the nomination for now, pending assurances that Ms. Majoras will pursue an agenda designed to ensure a competitive gasoline industry. The Jones, Day law firm, where Majoras works in the government regulation/anti-trust division, represents some of the biggest media (and media-related) companies in the country, including: DIRECTV, General Electric Company,The Goldman Sachs Group, Halliburton Company, Kellogg Brown & Root, Knight Ridder, Lehman Brothers Holdings, Liberty Media Group, Merrill Lynch & Co., Procter & Gamble, R.R. Donnelley & Sons, Thomson Multimedia S.A., Time Warner, the Tribune Company, and the Washington Post Company. The firm also represents ICANN (Internet Corporation for Assigned Names and Numbers).