Online privacy talks heat up

“Over the next 10 years, the single biggest driver of innovation–other than mobile–will be personal data,” he said.

That personal data is the lifeblood for tech heavyweights Facebook and Google. Lobbyists for both companies this week touted their new tools designed to give consumers more control over how their personal data is shared.

“Privacy is our number one challenge,” said Tim Sparapani, Facebook’s public policy director. “It also happens to be our number one opportunity.”

On Tuesday, Facebook founder Mark Zuckerburg announced in a blog post that users will soon be able to control who sees each individual piece of content they post or upload to the site. Zuckerburg asked users to review and update their privacy settings over the next few weeks as the changes are rolled out.

Sparapani said Facebook is such a new technology that missteps tend to be sensationalized, which leads to a knee-jerk reaction toward regulation.

Google recently introduced a “dashboard” showing users what information the company has about them. Pablo Chavez, Google senior policy counsel, said the company has realized that “it’s much better to be very transparent” about their practices.

Behavioral-targeted advertising, which tracks consumers’ online activity to serve ads related to their surfing habits, is the biggest concern to regulators. Boucher, Stearns and Rush have said they are most worried about companies collecting personal data without consumers’ knowledge.

In March, Google launched “interest-based advertising,” but allows consumers to opt out altogether.

Facebook, which now has 350 million users, is trying to make the distinction between first- and third-party advertising sellers on Web sites. Facebook has hundreds of thousands of applications developed by third-parties, but Sparapani says Facebook does not sell users’ information to them.

“We call it targeted ads rather than behavioral-targeted ads because it’s information users have voluntarily provided to us,” Sparapani said. “Most people don’t realize that when they go to a Web site, there are 10, 15 to 20 companies serving ads, selling ads, selling data and collecting data–and those aren’t the company you went to visit.”

Ari Schwartz, a privacy lobbyist for the Center for Democracy and Technology, said he has no problems with online advertising, “But the discussions in Washington assume that (behavioral-targeted) is the only kind of online advertising.”

In fact, it only makes up five percent of advertising on the Web. Still, surveys show that between 50 and 75 percent of Internet users are worried about how their data is collected and used.

This morning, CDT plans to launch a “Take Back Your Privacy” campaign encouraging consumers to demand improved privacy tools from Internet companies and to push Congress to enact comprehensive privacy legislation. (More on this campaign to come shortly.)