CHICAGO — When Microsoft unveils a new version of its Web browser, users will be able to traverse the Web like always but with one significant difference: The company plans to make “do not track” the default setting.
That means Internet Explorer 10 will automatically curtail a trove of personal information garnered while users surf anything from cat videos to mommy blogs, data shared by third-party companies to serve up targeted advertising. The move puts Microsoft out in front of a process to set new Internet privacy standards and puts it at odds with the $31 billion online advertising industry.
“Targeted advertising sells for 21/2 times as much as nontargeted advertising. It’s very effective,” said Mike Zaneis, senior vice president and general counsel for the Interactive Advertising Bureau. “When a browser like Microsoft comes in and sets (do not track) by default, they just gave everybody a 60 percent off coupon for our product. We can’t survive in that world.”
Facing increasing pressure to get ahead of potentially more restrictive legislation, the industry has been struggling to reach consensus for an online privacy standard. In 2011, the World Wide Web Consortium, which sets Internet protocols, put together a working group consisting of companies, privacy advocates and experts that met for the fifth time in June at Microsoft Corp.’s headquarters in Bellevue.
Some participants said the group should be able to hammer out a standard privacy policy by the end of the year, but schisms remain. One thing that most agree upon is that making “do not track” a default setting will not be part of their final recommendations. Microsoft’s proposed default setting bucks slowly building momentum for an “opt-out” solution.
“It seems clear to me that the Microsoft position, while it may be more protective of consumer privacy, is not a consensus position within the industry,” said Federal Trade Commission Chairman Jon Leibowitz.
“Do not track” follows the trail blazed by “do not call,” the 2003 federal law that empowered the FTC to create a national registry for consumers to opt out of unsolicited telemarketing calls. The FTC is calling on the digital industry to take a number of online privacy measures, including a “do not track” option.
“The marketplace needs to decide this, and we’re letting them,” Leibowitz said. “We have not proffered a proposal, other than calling for a ‘do not track’ option that would be an opt out with limits on collection, with certain exceptions.”
Efforts to develop an online privacy standard have failed to keep pace with the technology itself, which has fueled explosive growth in tracking and targeting Web users with “interest-based” advertising.
A report issued in June by Krux Digital showed data collection was up 400 percent year over year, with an average of 50 collection events per page view.
Much of that growth comes from online media exchanges, which use real-time bidding platforms to sell targeted ads to individual Web users.
Real-time bidding, a segment that barely existed three years ago, is on pace to represent more than a quarter of all U.S. digital display advertising spending by 2015, said Gordon McLeod, president of Krux, a 2-year-old data management company.
Targeted advertising commands a higher price and, some would argue, provides a more satisfying experience for consumers, who receive product offers they might actually be interested in.
“What a consumer benefits from with having their behavior followed is having things that are relevant to them coming up in their advertising experience,” said Jason Wadler, executive vice president of Evanston, Ill.-based Leapfrog Online, a direct response marketing company.
“If you don’t have the ability to target an individual or target a consumer segment, then you are going to see just a whole bunch of random ads that you don’t care about, and that’s not a good experience.”
Tracking has nonetheless raised concern among privacy advocates and regulators that perhaps too much information is being shared without consumer consent.
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