Targeted Online Advertising: What's the Harm & Where are We Heading?
Berin Michael Szoka
Adam D. Thierer
George Mason University - Mercatus Center
February 13, 2009
Progress & Freedom Foundation Progress on Point Paper, Vol. 16, No. 2, February 2009
The Federal Trade Commission should avoid laying the groundwork for more onerous regulation of the online advertising marketplace, which could become the equivalent of a disastrous industrial policy for the Internet and choke resources needed to fuel e-commerce and online free speech going forward.
With the release of the FTC's updated "Self-Regulatory Principles for Online Behavioral Advertising," the burden of proof remains on the FTC to show how concrete, not conjectural harms, would flow from efforts to create more targeted forms of advertising, before creating more regulatory mandates that would co-opt the voluntary self-regulatory process. Why is it that the FTC and so-called privacy advocates aren't doing more to highlight existing self-help tools or working to encourage the development of additional - and more robust - tools?
FTC intervention in privacy policies of online advertisers could have major consequences for continued creativity and innovation. Tighter regulation of the online advertising market in the form of privacy mandates would severely curtail the overall quantity of content and services offered - and greatly limit the ability of new providers to enter the market with innovative offerings. A better alternative is for self-regulation to be part of a layered approach that includes user education and empowerment through the development of tools and methods by which users can take privacy into their own hands.
Number of Pages in PDF File: 10
Keywords: online targeted advertising, online advertising, targeted online, online behavioral advertising, online ads, internet advertising, internet ads, self-regulation, FTC, Leibowitz, online privacy, consumer privacy, consumer protection, privacy, free speech, e-commerce, Harbour
JEL Classification: D18, D8, D82, D83, I2, I20, I28, L1, L11, L15, L5, L51, L82, L86, L96, L98, M3, M37, M31, O3, O31Accepted Paper Series
Date posted: February 26, 2009 ; Last revised: June 18, 2009
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