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SAN FRANCISCO -- A non-profit consumer advocacy group plans to ask federal regulators today to rein in the fast-growing $100 billion online marketing industry.
The Center for Digital Democracy is expected to file a Federal Trade Commission complaint asking the agency to investigate online advertisers. It also wants the FTC to force companies to halt what it calls deceptive practices and encourage Congress to pass legislation bolstering consumer privacy protection.
Executive Director Jeff Chester says hundreds of companies now track consumers online, gathering detailed dossiers about reading, spending and other habits that endanger personal privacy. Privacy policies published on websites don't adequately warn consumers, he says.
"The FTC has largely ignored the critical developments of the electronic marketplace that has placed the privacy of every American at risk," a draft version of the complaint says. The complaint comes amid rising privacy concerns as billions of dollars in commerce shifts to the Internet and mobile devices, creating new global players such as search giant Google. And it comes a week before the FTC holds a three-day e-commerce conference that's "insufficient" to shield consumers, the center says.
The FTC declined to comment.
The center, based in Washington, gets financial support from philanthropies including the Ford Foundation and the John D. and Catherine T. MacArthur Foundation, Chester says. It's joined in its FTC filing by the U.S. Public Interest Research Group, another non-profit consumer advocate.
While the complaint says questionable online marketing practices are widespread, it wants the FTC to first examine Microsoft's adCenter service. Launched last year, it lets advertisers bid to have advertisements published next to online search results, similar to Google's better-known AdSense program.
Chester says adCenter endangers privacy because it relies on data gathered from the No. 1 software maker's widely used Hotmail e-mail service and other Microsoft products. "They have fully opened up the entire suite of Microsoft's very extensive properties to marketers," Chester says.
Microsoft disputed the center's allegations, saying it protects consumer privacy and is "very open" about its privacy policies.
Chester has been involved in high-profile privacy issues for some time. He co-founded the Center for Media Education, which filed an FTC complaint 10 years ago that helped spur passage of the Children's Online Privacy Protection Act of 1998, Chester says.
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