FTC Outlines Recommendations for Online Advertising In Testimony Before Senate Homeland Security Subcommittee

For Release

The Federal Trade Commission testified before Congress today on the agency’s ongoing efforts to protect consumers from emerging threats related to online advertising, as well as the Commission’s recommendations in this area.

Testifying on behalf of the Commission before the Senate Committee on Homeland Security and Governmental Affairs’ Permanent Subcommittee on Investigations, Maneesha Mithal, Associate Director of the FTC’s Division of Privacy and Identity Protection, outlined steps the agency is taking to address concerns related to online advertising through enforcement and consumer education.

The testimony highlights work by the Commission on three consumer protection issues affecting the online advertising industry: privacy, spyware and other malware, and data security.

In the area of privacy, the testimony notes the recommendations put forth in the Commission’s 2012 privacy report, which encourages businesses to provide consumers with simpler and more streamlined privacy choices about their data, through a robust universal choice mechanism for online behavioral advertising.

The testimony also addresses a number of privacy cases brought by the FTC against companies in the online advertising industry.  For example, the testimony describes the FTC’s 2012 settlement with Google, in which the company agreed to pay a $22.5 million civil penalty to resolve charges that it misrepresented to some consumers that it would not place tracking cookies or serve targeted ads to them.

The testimony also describes the FTC’s cases to combat spyware and other malware. These cases support three core principles: first, that a consumer’s computer belongs to him or her, and it must be the consumer’s choice whether to install software; second, that buried disclosures about material information necessary to correct an otherwise misleading impression are not sufficient in connection with software downloads; and third, that a consumer should be able to disable or uninstall any software they do not want on their computer.

The testimony also highlights the FTC’s extensive consumer education work aimed at helping consumers avoid and detect spyware and other malware, including its sponsorship of OnGuardOnline.gov.

On the topic of data security, the testimony underscores the Commission’s enforcement actions, noting that the agency has obtained settlements in 53 data security cases, including recent cases against the mobile app company Snapchat, as well as with Credit Karma, Fandango and home security camera maker TRENDnet.

The testimony recommends expanding efforts to educate both consumers and businesses, and also encourages industry self-regulation efforts aimed at protecting consumers from malicious online advertisements.

In addition, the testimony renews the Commission’s call for the enactment of a strong federal data security and breach notification law, noting that a national law would simplify compliance for businesses while ensuring that all consumers are protected. The testimony also notes that supplementing the Commission’s existing data security authority with the ability to seek civil penalties in appropriate circumstances would provide a deterrent to those engaging in unlawful conduct that puts consumers’ personal data at risk.

The Commission vote approving the testimony and its inclusion in the formal record was 5-0.     

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