Practical Privacy

COPPA, Behavioral Ads, Mobile Marketing and Other Big PPS Takeaways

By Annie C. Bai, CIPP/US

Jed’s not the only one who was having a good time at last week’s Practical Privacy Series in NYC. Across the way, many of us found that an entire day was barely enough to devote to Online Marketing. First, it was all about the kids, then it was all about the web, and finally we ended with a rousing roundtable on Big Data. Here are some of the tidbits from the day that caused me to take pause and grab my pen.

photo credit: Lights In The Dark via photopin cc

Children’s Advertising

In her overview of the FTC’s changes to COPPA (the Children's Online Privacy Protection Act), Allison Fitzpatrick, partner, Davis & Gilbert LLP, likened the July 1st effective date of COPPA amendments to an asteroid colliding with the world of children’s websites and online services. These amendments modified key definitions of COPPA for an “operator,” “website or online service directed to children,” “personal information” and “support for internal operations.”  Operators are strictly liable for the personal information collection practices of their third parties even if they do not own, control or have access to this personal information, including with respect to persistent identifiers that  are used to behaviorally target and track children. The rationale here is that child-directed operators are in the best position to know what plug-ins are integrated into their site/service. Earlier in 2013, FTC Senior Staff Attorney Mamie Kressess warned child-directed websites that they would face COPPA enforcement actions if they failed to stop third parties on their sites from collecting data without parental consent. Sites that are continuing to collect persistent identifiers from children for purposes of tracking without parental consent are on a possible landing zone for Fitzpatrick’s asteroid.

The good news is that FTC Senior Staff Attorney Peder Magee stated that “e-mail plus” —the most popular parental consent mechanism—is likely to survive because the FTC did a cost-benefit analysis which took into account that the mechanism is only for internal use. This week, the Commission denied, 4-0, AssertID’s application for a VPC mechanism based on social graphing through Facebook and other social platforms.

Peder also covered compelling topics such as the sufficiency of age gates, exceptions to the third-party collection rule, what is actual knowledge of an operator—here, the FTC likes the idea of a third party “child-directed site” signal—and best practices for schools. Then, Wayne Keeley of the Children’s Advertising Review Unit, discussed its history as a self-regulatory leader and how it has revised its guidelines to harmonize with the COPPA amendments. His advice to operators is to do your due diligence!  From this panel, a theme emerged that would follow us throughout the day: COPPA’s constraints on behavioral advertising have resulted in a serious dent in the profitability of smaller educational websites, raising concerns about the interplay of regulation and business viability— and the Internet as we know it.

Behavioral Advertising, Do Not Track and Other Tracking Practices

This concern is always at the fore-front for members of the advertising ecosystem. The next panel sung the praises of self-regulation and the benefits of interest-based advertising. Network Advertising Initiative (NAI) Executive Director and General Counsel Mark Groman, CIPP/US, walked us through the key players and pathways in online marketing, which is estimated to be a $500 billion industry by 2015—check out some of his neat flowcharts in the slides.

Brian Miller of MediaMath succeeded in impressing us with the statistic that his firm alone processes 1.6 million advertising bids per second. But, however well Mark’s slides break it down, the reality is that it is becoming harder to keep track of who does what to whose data in this crowded space. For example, in the area of retargeting ads, the FTC admitted that it is challenging to distinguish between first-party publishers and third-party publishers.

Evidon Chief Privacy Officer Todd Ruback, CIPP/US, CIPP/E, CIPP/IT, described his company’s efforts to reveal the invisible web to consumers through its Ghostery product. For advertisers, the NAI promulgates its Self-Regulatory Code of Conduct, which is based upon three categories of data protection and covers data collected across mobile apps. In 2012, it reviewed 76 of its nearly 100 member companies for compliance with the code and did not find any violations of its proscriptions for the use of sensitive consumer data. The panelists ended by pointing to some of the pressing hot topics in cross-device marketing, Do-Not-Track efforts and the likely demise of the cookie—which brings us to the next topic, where the cookie is irrelevant, but the device ID raises many issues of concern.

Mobile Marketing

Weather Channel Chief Privacy Officer Lael E. Bellamy, CIPP/US, first reminded us that there are lot of good cookies, such as opt-out cookies and frequency cookies—so that you don’t see the same ad over and over again.

But, back to that user ID…

In mobile marketing, it is crucial to have a mobile-specific privacy policy that discloses the tracking and use of device IDs.
Annie C. Bai, CIPP/US

In mobile marketing, it is crucial to have a mobile-specific privacy policy that discloses the tracking and use of device IDs. Bellamy and Mark Connon, chief revenue officer at Nexage, echoed Keeley’s advice that companies should use caution in choosing their third-party data processors because it ultimately impacts your brand. Bellamy discussed her company’s specific challenges in dealing with Obamacare and “belly fat” advertisements, the host of third-party marketers on their site—I saw 30 this morning using my Ghostery tool—and the costs of litigation.

Alan Chapell, CIPP/US, president of Chapell & Assoc., pointed out that many of the “bad actors” in this area aren’t that bad but are naïve about the rules, which are not centralized but are created or influenced by the regulators, the class-action bar and the press. The panelists also reminded us that opt-out mechanisms are only applicable to targeted advertising. There are still over 300 ad tech companies with their own exchanges that will continue to serve nontargeted ads. So why not benefit from targeted ads that provide offers based on your expressed interests, your movements and even your hyper-local movements?  Well, for one matter, the notice practices in this area truly could use improvement. Mark bluntly characterized the current notice landscape as a fiction—because no one is reading those lengthy privacy policies. And, if one decides to still go for an opt-out, there is still the matter of realizing it across various platforms. So, it’s a busy, busy space and our panelists encouraged everyone to consider the benefits of responsible marketing.

Social Media

We finished up the day with a dense discussion of the sources of law that impact social media. From the Communications Decency Act to case law on Facebook sharing to state laws to FTC enforcement, there is so much new and ongoing regulation in this field, I am tempted to say that you should just attend another talk given by Davis & Gilbert Partner Gary Kibel, CIPP/US. He did impress upon us that social media benefits from being held to rules applicable to the online world rather than those of traditional publishers. Kibel, Specific Media Senior Vice President Drew Bordages and TD Bank AVP Privacy Albert Raymond, CIPP/US, shared entertaining stories about social media mishaps and loss of control over corporate accounts (think Chrysler). Albert’s big takeaways were to communicate, train, be flexible and stay the same course online as offline.

As for return on investment, though, good luck with that for now!

More from Annie C. Bai

About the Author

Annie C. Bai, CIPP/US, is a graduate of NYU School of Law. She works part time for the Entertainment Software Rating Board, speaks on privacy law for New Directions for Attorneys at Pace Law School, consults with Mezzobit and contributes to blog.security-breaches.com. She externed in the privacy group of Wiggin and Dana LLP earlier in 2013 and is currently leading a privacy audit for Single Stop USA. Annie is a Data Neutrality Privacy Fellow.

See all posts by Annie C. Bai

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