| April 15, 1997 Federal Trade Commission RE: CONSUMER PRIVACY 1997 -- COMMENT P954807 The American Advertising Federation (AAF) welcomes the opportunity to provide comments to the Federal Trade Commission on the issue of Consumer Privacy. The AAF is the Unifying Voice for Advertising. We are the only professional advertising association that binds the mutual interests of corporate advertisers, agencies, media companies, suppliers and academia. The AAF's 50,000 members share a commitment to make advertising a positive force in America's economy and culture. We are advocates for the rights of advertisers and we educate policymakers, the news media and the general public on the value that advertising brings to the well-being of the nation. We also cultivate the advertising industry's present and future leaders. The AAF realizes there are tremendous issues to be addressed in regard to consumer privacy, and will seek to provide the Federal Trade Commission (FTC) with a general overview of ad industry efforts and principles which respond to FTC concerns. PRIVACY AND SECURITY The AAF believes that commerce will thrive on the Internet if the privacy rights of consumers are balanced with those of the private sector. So, both will benefit from the free flow of information. The advertising industry has supported the "Fairness Principle of Privacy" first outlined by the Privacy Working Group of the National Information Infrastructure (NII) in the NII Privacy Paper published in 1995. The "Fairness Principle" states that "(i)nformation users should not use personal information in ways that are incompatible with the individual's understanding of how it will be used." The goal of this principle is that personal information should not be used in a way that goes beyond an individual's understanding and consent. If the manner of use of the information is not foreseen, then the consumer has not provided implicit consent. BALANCING NEEDS The Internet is an invitational medium, not an intrusive one. Thus, information is brought into a home at the request of a consumer. Consumers only seek information about products and/or services which they desire. Such direct, one-on-one communication with consumers places control in the hands of the consumer rather than the media. In this environment, the quality and integrity of the information and content is key. Once information is sought by a consumer, the AAF believes the privacy "Fairness Principle" (as referenced above) should be endorsed as the "guideline" for both commercial transactions and the gathering of personal data on the Internet. Both consumers and private sector industry must feel comfortable that such commercial transactions and gathering of personal data are secure. The advertising industry has a responsibility to respect consumer privacy, yet consumers may have a responsibility to become more savvy about sharing personal information. There is a need to balance the interests of the individual with the goals of commerce and business in this new media. Advertisers must balance the individual's right to privacy with the responsibility of information holders and transmitters. THE IMPORTANCE OF TECHNOLOGY AND EDUCATION Technological advancements can often address concerns regarding privacy issues on the Internet, and technology can help alleviate government concerns regarding Internet access. Computer/Internet software exists that allows consumers to limit access to certain Internet sites or categories of sites. Such technology empowers the consumer, and in regard to concerns related to children, technology places access control in the hands of parents or guardians, and not the website owner. Technology offers more effective solutions than do regulations to Internet challenges, while not limiting the consumer's choice of information available. Technology and education are key to resolving privacy concerns. Industry must continually improve technology that protects consumer privacy, and seek avenues to educate the public on accessing and using these important technologies. The Direct Marketing Association (DMA), in an effort to educate the public on privacy issues on the Internet, has published an educational booklet entitled "Get CyberSavvy". The AAF endorses efforts such as the DMA's to educate consumers on these issues. The AAF agrees that privacy policies must provide adequate privacy protection to consumers, while not impeding the flow of information on the Internet. We strongly support a market based approach to privacy which incorporates privacy principles. The AAF also endorses the DMA's guidelines on data collection and list rental practices. These guidelines encourage marketers to periodically inform consumers who have provided marketers with data, that the data may be rented or sold for marketing purposes. The guidelines also allow consumers the opportunity to opt-out of the marketing process. The AAF again believes that technological advancements and education will also alleviate privacy concerns in this area. INTEGRITY OF DIGITAL INFORMATION The interactive media is one based on digits. Thus, the integrity of that digital information is very important. We support an encryption policy that promotes the growth of global electronic commerce and secure communications. If advertising messages, and even substantiated claims, can be reformulated, redirected, changed or copied through manipulation of digital information, such tampering could mislead consumers, and simultaneously damage an advertiser's credibility. We also point out that privacy concerns are not applicable only to the digital media and digital commerce. Therefore, these concerns should be treated as they are in other information arenas. Many corporations already gather consumer information through many sources - not just their websites. To illustrate this point, should a wine-enthusiast consumer purchase a case of wine with their credit card, the credit card company can share that information with a Napa Valley Wine Tour operator who sends the cardholder a brochure. The cardholder is likely to welcome this information. Yet if the credit card company shared the wine purchase information with the cardholder's health insurance company, the cardholder could object -- especially if his insurance rates increased as a result. Thus, we must remember that consumer privacy issues are the same, no matter the medium. SELF-REGULATION Likewise, no matter the medium, general advertising principles remain the same. Truthful and accurate advertising should be the cornerstone of all self-regulatory efforts for all media - including the Internet. Many self-regulatory bodies, including the National Advertising Division, the Children's Advertising Review Unit, and the Direct Marketing Association have forwarded guidelines for addressing internet privacy and advertising issues. These organizations already have begun to act upon consumer complaints, and enforce truth in advertising on the Internet. The advertising industry applauds and must enforce industry attempts to self-regulate interactive advertising. Advertisers must be concerned about the credibility of advertising in the interactive media. If false claims are easily disseminated, advertising will only lose credibility in cyberspace. Marketers must support, endorse and promote a self-regulatory advertising environment that enhances the credibility of advertising and underlines a standard of truth in advertising. The AAF strongly believes that advertising industry self-regulatory efforts should be promoted, endorsed and supported by all interested parties. We encourage the FTC to encourage the private sector and the marketplace to further develop standards and technological solutions to privacy issues. Such solutions will empower consumers and help resolve Internet access issues. It is inadvisable for governments to promulgate technical standards to "govern" or regulate the Internet, because technology is developing much too quickly. GLOBAL CAPABILITY OF THE INTERNET Because the interactive on-line media is global in nature, advertisers, large and small, immediately become global advertisers on-line. The fact that an advertising claim may be viewed around the world creates unprecedented conflict of law issues. We know that governments are meeting and discussing the technological implications of internet communication. Many different countries have varying laws and policies in the consumer privacy area, and the AAF strongly suggests that the FTC use the Administration's policy approach to privacy as a guideline, and not embrace the severely restrictive guidelines of certain other countries as a standard in developing consumer privacy policies. CONCLUSION The Internet will narrow the commercial globe and enhance international access to information. We commend the Federal Trade Commission for seeking comments on these important issues that will have global ramifications on consumer privacy and marketing practices. The AAF believes that the creation of a coherent policy framework which allows both government and the private sector to work together to further develop technological solutions to Internet challenges, will enhance the future of the global marketplace. Thank you. Respectfully submitted, Wally Snyder |