FTC Considers Allowing Consumers to Opt Out of Behavioral Marketing

As the grid of smart products grows more crowded with cars, appliances and even clothing carrying sensors, Web access and other technology for transmitting data between consumers and companies, the Federal Trade Commission is considering “do not track” policies. (For more on smart products, see “The Internet of Things: How CIOs Can Influence the Next Wave of Product Innovation.”)

In 2004, the FTC worked with the Federal Communications Commission to create the National Do Not Call Registry, which allows consumers to opt out of receiving marketing phone calls.

Similarly, a “do not track” list would let people choose not to get behavioral marketing advertisements from companies tracking what consumers do online, according to testimony by FTC Chairman Jon Leibowitz to the Senate Committee on Commerce, Science and Transportation in July. In 2009, the FTC issued guidelines to online commerce companies for revealing data-collection policies and handling customer information. These guidelines are aimed primarily at online companies, but Leibowitz told the Senate that consumers, privacy experts and other industry watchers question whether existing guidelines are keeping pace with advances in areas such as mobile devices and cloud computing.

CIOs will have to watch regulatory developments, says Vinnie Mirchandani, author of The New Polymath: Profiles in Compound-Technology Innovations. “Compliance will extend to this realm.”

The FTC is due to publish a comprehensive report on privacy and technology, which is expected to indicate whether it will propose formal regulations, by the end of the year.

Follow Senior Editor Kim S. Nash on Twitter: @knash99.