FTC urged to bring order to data collection 'Wild West'

Privacy groups have complained to the FTC about advertiser profiling

Three privacy groups have filed a formal complaint to the Federal Trade Commission (FTC) over the unregulated collection of computer data.

The US Public Interest Research Group, the Center for Digital Democracy and the World Privacy Forum want the FTC to investigate the real-time data-targeting auction and exchange online marketplace, saying that there is a "Wild West" atmosphere, with consumers being profiled without their knowledge or consent.

"This massive and stealth data collection apparatus threatens user privacy. It also robs individual users of the ability to reap the financial benefits of their own data, while publishers, ad exchangers and information brokers (so‐called 'ad optimisers') profitably cash in on this information," the complaint [PDF] reads.

"Beyond these concrete harms, we also believe the FTC must address the moral and ethical consequences to consumers and citizens when they are subjected to an invisible system that sells access to them, wherever they go online, to third parties."

Among the companies cited in the complaint are Google, Yahoo, PubMatic, TARGUSinfo, MediaMath, eXelate, Rubicon Project, AppNexus and Rocket Fuel.

"Consumers will be most shocked to learn that companies are instantaneously combining the details of their online lives with information from previously unconnected offline databases without their knowledge, let alone consent," said Ed Mierzwinski, consumer programme director at the US Public Interest Research Group.

"In just the past few years, a growing and barely regulated network of sellers and marketers has gained massive information advantages over consumers. "

The groups want the FTC to force companies to include an opt-in mechanism before data is collected, ensure consumers get compensation for providing their data and examine the practice of 'redlining', where companies limit access to content based on the marketing profile of the user.

"FTC inaction has encouraged the data collection and ad targeting industry to expand the use of consumer information for personalised advertising," said Jeff Chester, executive director at the Center for Digital Democracy.

"The FTC's failure to adequately protect the privacy of consumer transactions online, including those that involve financial and other sensitive information, is irresponsible.

"US consumers, especially during this time of economic hardship for so many, need an FTC that is proactive in protecting their interests."