The groups, including the Center for Digital Democracy, the Electronic Frontier Foundation (EFF) and the U.S. Public Interest Research Group (US PIRG), want the U.S. Congress to pass legislation that would bar Web sites and online advertising networks from collecting sensitive data such as information about health, finances, race and sexual orientation.
In a broad set of new recommendations for privacy regulations released Tuesday, the groups also called on the U.S. Congress to prohibit Web sites and ad networks from collecting behavioral information about children under age 18, whenever it's possible to distinguish the age of the Web user, and to require that online businesses inform consumers about the purpose of the information collection.
"The basic idea is ... we want consumers to be able to take advantage of all the new technologies without having the technologies take advantage of the consumers," said Pam Dixon, executive director of the World Privacy Forum. "Right now, that balance is not there."
Many Web users are unaware of all the information that's being collected about them, especially by ad networks engaged in targeted or behavioral advertising, the groups said. The groups released recommendations to Congress just before lawmakers return to Washington, after August recess. Several lawmakers, particularly Representative Rick Boucher, a Virginia Democrat and chairman of the House Subcommittee on Communications, Technology and the Internet, have talked about pushing for online privacy legislation late this year.
The groups recommended that consumers should be able to obtain the information collected by behavioral advertising vendors, and should be able to challenge the data held about them, the groups said.
The groups also called on the U.S. Federal Trade Commission to establish an online behavioral tracking registry, similar to the national do-not-call list, through which consumers could sign up to opt out of all behavioral tracking.
Congress should also allow consumers to file lawsuits against online companies that do not follow privacy rules, and Web sites should not be able to use pretexting practices, such as running a contest that seeks the collection of consumer information in exchange for the chance to win a prize, the groups said.
The new rules are needed because consumer protections are outdated and online advertising industry efforts to self-police have fallen short, the groups said. "The technology has outpaced consumer protections," said Gail Hillebrand, a senior attorney at Consumers Union.
Representatives of the Network Advertising Initiative (NAI), a cooperative of online advertising and analytics companies, and the Interactive Advertising Bureau (IAB), a trade group representing online advertisers, disputed the privacy groups' assertions that industry self-policing hasn't worked.
The NAI allows Web users to opt out of behavioral tracking by 35 ad networks, including the 10 largest, said Charles Curran, NAI's executive director. Behavioral advertising allows Web sites to deliver relevant advertising to visitors, which in turn helps Web sites make money through ad clicks, he said.
Forcing Web sites to get opt-in permission before tracking user behavior would lead to much less behavioral advertising, less profits for Web sites and fewer free services on the Web, critics of an opt-in approach have said.
NAI's approach, which requires an opt-in only for sensitive information, achieves a balance between privacy and economics, Curran said. "We think we're trying the right approach," he added.
Targeted online advertising is nothing new, and many consumers want to see more relevant ads, added Mike Zaneis, vice president for public policy at IAB.
"It is naïve for consumer groups to claim that the delivery of more relevant online advertisements is a new phenomenon that has suddenly developed, thereby creating a new threat to consumers," he said. "The creation of a broad opt-in requirement for online advertising would be detrimental to both consumers and businesses. Consumers love the free services and content that online advertising pays for, and the industry principles strike the right balance of providing strong consumer privacy protections, while allowing industry to innovate and provide new and better products free of charge."