Obama’s FTC Spells Trouble with a Capital T

All evidence indicates that President Barack Obama’s choice of Jon Leibowitz to head the Federal Trade Commission is very bad news for marketers.

At the very least, it’s an indication the days of self regulation in online advertising are likely coming to a screeching halt.

Moreover, word on the street is there are more troublesome picks on the way.

First, Leibowitz.

After the FTC recently produced a revised set of guidelines for behavioral online advertisers, Leibowitz said: “Put simply, this could be the last clear chance to show that self-regulation can – and will – effectively protect consumers’ privacy in a dynamic online marketplace.”

In November 2007, Leibowitz advocated that companies should take an opt-in approach to tracking Web site visitors’ behavior.

“The current ‘don’t ask, don’t tell’ mentality in online profile tracking needs to end,” he reportedly said in a speech delivered just before a two-day workshop the FTC held on behavioral marketing.

He has also endorsed the mother of bad ideas in relation to online advertising: a national do-not-track list, a scheme that would require all advertisers that use tracking technology such as cookies to register their domains with the agency so consumers could set their browsers to block them.

Not surprisingly, privacy advocates are getting a case of the tingles

According to CNET, Jeff Chester, executive director of the Center for Digital Democracy, said: “Leibowitz will help transform what has been a largely anemic regulatory watchdog during the Bush years into an agency that sees its first priority as consumer protection. Public interest groups such as mine appreciate that Leibowitz has called for tougher online privacy safeguards and that his door has always been open.”

For an idea of how Chester thinks, consider the following:

In an interview with me in 2006, he claimed that online information can be personally identifiable even if the advertiser doesn't have a Web site visitor's name or address—a claim that runs counter to the widely accepted definition of the term.

When I made clear I thought his definition was ludicrous, he became irate and said: “Those unique identifiers attached to your computer or in fact those unique identifiers attached to your set-top box or your mobile phone, have psycho-demographic attributes that allow them to more precisely identify your characteristics, [and] your characteristics, whether or not they are Joe Blow or 10 versions of Joe Blow, represent who you are. When you take powerful content applications, and when you take marketing strategies through ad networks across Web sites without user consent and you are targeting them based on what you've identified are their psycho-social vulnerabilities and interests, that's personally identifiable information."

Got that? What could be an entire family’s anonymous browsing behaviors are “psycho-social vulnerabilities” and, therefore, personally identifiable information.

That a man who thinks like Chester endorses Leibowitz should send a collective chill down online marketers’ spines.

But wait, it gets worse.

Word on the street is that Obama will appoint Peter Swire to a seat on the commission that is currently open. Swire was chief counsel for privacy in the Clinton administration.

Rumor also has it that Obama will pick David Medine to head up the FTC’s consumer protection division. Medine is currently a partner at the law firm of WilmerHale in Washington D.C. Ten years ago, Medine did a stint as associate director for financial practices at the FTC.

According to his bio on WilmerHale.com: “At the FTC, Mr. Medine's responsibilities included the development of policy and regulations, oversight of programs involving consumer financial services, privacy and e-commerce and enforcement activities in those areas. He participated in drafting the Gramm-Leach-Bliley financial privacy and the Children's Online Privacy Protection Act (COPPA) regulations.”

Does anyone see a pattern emerging here? These are not political hacks. They are the privacy movement’s biggest guns and they’re gaining control of the federal agency in charge of regulating marketing and advertising. They will have a Democratic House, a Democratic Senate and a Democratic president at their disposal.

Anything they want to ram through … well, they won’t even have to ram it through, now will they. With the current public mood toward industry self-regulation being one of general antipathy, a gentle nudge should do it.

We’re looking at a potential marketing-law bonanza, folks.

And if e-mail marketers think they’re exempt from the online-ad-tracking-and-privacy debate, they’re in for a rude surprise. There’s not an e-mail marketer out there who doesn’t track post-click behavior.

You know all those cool metrics e-mail marketers love to discuss? Pretty soon there may not be any.