Two consumer advocacy groups have filed a complaint with the US Federal Trade Commission (FTC) asking the regulatory agency to investigate alleged abuses resulting from Microsoft’s adCenter services and the private user data the company collects.
The groups found Microsoft’s Hotmail service “especially disturbing” as the email service is used to bolster adCenter targeting by collecting information on 30 million monthly visitors.
In the filing, the groups complain that the FTC is behind the curve in dealing with data collection and interactive marketing systems used by Internet companies like Microsoft, Google, and Yahoo! to track, profile, and target users as they surf the Internet.
“Unfortunately, over the last several years the FTC has largely ignored the critical developments of the electronic marketplace that have placed the privacy of every American at risk,” said Jeff Chester, CDD executive director.
“The FTC should long ago have sounded a very public alarm–and called for action–concerning the data collection practices stemming from such fields as Web analytics, online advertising networks, behavioral targeting, and rich ‘virtual reality’ media, all of which threaten the privacy of the U.S. public.”
Among the concern is that current privacy disclosure policies are inadequate to inform users about what data are collected and how that data is used. The CDD and US PIRG strongly doubt that the information, as is claimed, is really non-personally identifying. This was illustrated by the recent AOL search data leak that led several news organizations to pieced together enough information to identify specific AOL users.
Last year, the Department of Justice subpoenaed all the major search engines, including MSN, AOL, Yahoo! and Google, asking them to release reams of search data collected as part of an effort to bolster legislation against child pornography. Google, the lone holdout among the search engines, was eventually ordered by a judge to turn over some information.
In spite of recent events, and a steady echo of privacy concerns in the blogosphere, the CDD and US PIRG say the FTC hasn’t been paying attention to what’s been going on in cyberspace.
“The emergence of this on-line tracking and profiling system has snuck up on both consumers and policymakers and is much more than a privacy issue,” said U.S. PIRG Consumer Program Director Ed Mierzwinski.
“Its effect has been to put enormous amounts of consumer information into the hands of sellers, leaving buyer-consumers at risk of unfair pricing schemes and with fewer choices than the Internet is touted to provide.”
There are four specific requests made of the FTC:
- launch an immediate investigation into the online marketplace
expose practices that compromise user privacy
issue the necessary injunctions to halt practices that abuse consumers
craft policies and recommend federal legislation to prevent such abuses.
“Microsoft, like Google and Yahoo, is actively rewriting the rules that govern the online marketplace,” said Chester. “It is the FTC’s job to make certain that these rules reflect more than corporate self-interest. The public interest matters, too, and it is the FTC’s responsibility to protect and promote that vital perspective, by issuing injunctions against the most egregious of the new invasive advertising practices, which are fully described in our complaint.”
Microsoft didn’t address the charges specifically, but reiterated its commitment to consumer privacy.
“Consumer trust is essential to the success of online business and helping protect consumers’ privacy is a top priority for Microsoft in our development and implementation of online services,” Microsoft Senior Attorney Mike Hintze told Murdok.
“We are very open about our privacy policies and practices across all of our online services and advertising products because we believe that providing consumers with this type of transparency and control is extremely important, and it will continue to be a central focus of how we design and deliver online services both now and in the future.”
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