DULY NOTED
ON THE HILL
The Federal Trade Commission
(FTC) sued Wyndham Worldwide
Corporation claiming there were
three data breaches at Wyndham
Hotels during the past two years.
These breaches, the
FTC claims, lead to
Wyndham customers seeing fraudulent charges on their
credit card accounts
and millions of dollars in losses.
Do Not Track is a major point
of discussion for marketers
Data broker Spokeo, Inc. agreed
to pay $800,000 in a settlement
with the FTC. The FTC alleged that
Spokeo didn’t follow the FTC’s Fair
Credit Reporting Act when marketing consumer profiles to human
resources, background screening,
and recruiting companies.
By Erin Dostal
The World Wide Web Consortium (W3C) Tracking Protection Working Group, a consortium of companies
and individuals that drafts guidelines for
marketing on the Web, has been in talks
about “Do Not Track” (DNT), but little, so
far, has been resolved.
“I think a lot of companies have consistently
said that transparency and consumer choice
are a good thing,” says Chris Olsen, assistant
director of the Division of Privacy and Iden-
tity Protection at the Federal Trade Commis-
sion (FTC). “The implications of this could
conceivably be that with the additional trans-
parency that Do Not Track provides, users
are able to express choice more easily and
have more confidence in the online market-
place…I think that’s something that the ad
industry would be in favor of.”
Congress will likely follow the W3C’s lead
on DNT, he says. W3C hopes to resolve
DNT by the end of the year, but if it can’t
come to a conclusion, Olsen says, it’s unlikely
Congress will either.
Part of the issue, according to Darrin
Shamo, director of direct and online marketing at Zappos, is that direct marketers weren’t
careful enough about informing the public
in the first place. Consequently, consumers
believe they are being tracked with personal
information, when in fact they probably are
not. Zappos uses cookie-based browser tracking data that’s never shared with a third party
nor is personally identified. “We should have
demonstrated the real value to consumers so
that they didn’t need to find a way to regulate
this industry,” he says.
“We put those things that are important
for [consumers] at their fingertips,” Shamo
adds. “We’re always looking for ways to add
value for users.”
“We’re always looking
for ways to add value
for users.”
The commis-
sioner of the FTC
J. Thomas Rosch
wrote a letter
blasting Microsoft
for making “Do Not
Track” the default setting in its Inter-
net Explorer browser. Rosch argued
that it didn’t give consumers enough
choice. It should be up to consum-
ers, not Microsoft, to opt in or opt
out of online targeted ads, he said.
Darrin Shamo
Director of direct and online
marketing, Zappos
The four operators of a firm called
the Debt Advocacy Center agreed
to pay more than $750,000 after
the FTC alleged that they had
deceptively marketed mortgage
modification services. In addition,
all of the defendants in the case will
be permanently banned from selling
mortgage assistance services.
When Zappos began using targeted online
advertising, it used ads that would follow
shoppers around the Web, showing them ads
with the same shoes they had just viewed on
Zappos, which alarmed customers. Zappos
“dumbed down” its technology. Instead of
overtly displaying what a customer looked at,
it shows similar or seasonal products.
If DNT legislation passes, Shamo says “it
will put the industry back…we would prob-
ably see a dip in revenue.”
Loren Bendele, CEO of Savings.com, says
one key to succeeding in spite of the poss-
ible legislation is building consumer trust.
“There’s so much that’s good for consumers,”
he says. “Once customers tell you what they
want you to know, you’re fine.” ■
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