On Monday, November 16, the Federal Trade Commission (FTC) held
a workshop that
examined the key privacy and security issues raised by emerging
technologies that track users across their various devices, such as
smartphones, tablets, desktops, TVs and other Internet-connected
devices. The outcome of the workshop has potentially broad
implications for any company that provides websites, apps and
online services to consumers, since cross-device technologies are
increasingly being used to personalize content, improve targeting,
provide security and fraud prevention, and perform analytics and
attribution functions.
As companies integrate cross-device capabilities into their online
products and services, the FTC's workshop will serve as an
important guide. In addition, we expect that the FTC will issue a
staff report that outlines key issues and best practices for
cross-device tracking in the future. The FTC has invited companies
to submit public comments on the topic by December 16, 2015.
What is Cross-Device Tracking?
A key goal of the workshop was to establish a baseline understanding of what constitutes cross-device tracking. Cross-device technologies often use a combination of "probabilistic" and "deterministic" methods to infer connections among consumers' various devices, such as smartphones, tablets, desktops, TVs and other Internet-connected devices. For example:
- Probabilistic Linking. Probabilistic methods collect and use device attributes (such as device IDs, IP address, time/date, etc.) to determine the statistical likelihood that browsers or devices are shared by the same user or household.
- Deterministic Linking. Deterministic methods use authenticated connections—such as through account logins or hashed email addresses—to link devices and provide a high level of confidence that devices are shared by the same user.
After a company establishes connections between devices, they often store that information in a "device graph" that may, in some instances, be shared with third parties. Panelists at the workshop noted that other technologies may be used to provide cross-device capabilities (such as "audio beacons" that use audio signals to establish connections), although alternative technologies do not appear to be widely used at this time. Cross-device technologies differ substantially across the industry, and workshop participants noted that it can be difficult for consumers to detect whether and what cross-device technologies are being used on any particular website or mobile app.
Key Privacy Issues Raised by FTC Chairwoman Edith Ramirez
FTC Chairwoman Edith Ramirez opened the workshop by highlighting some of the key issues raised by cross-device tracking technologies. Although many of her concerns are similar to those related to online and mobile tracking in general, Chairwoman Ramirez emphasized that cross-device technology adds a layer of complexity that magnifies existing privacy concerns. In particular, the Chairwoman focused on the following challenges:
- Transparency. Chairwoman Ramirez noted that cross-device technology raises new transparency concerns because companies may collect and use information in new ways that are often difficult for consumers to detect. She also expressed concern that consumers may not understand how their cross-device data may be used, especially if it is used for potentially sensitive or discriminatory purposes.
- Meaningful Choice. She also explained that concerns about transparency may be exacerbated by a lack of meaningful choice for users. For example, she noted that consumers are not always adequately informed or educated regarding their opt-out choices.
- Data Minimization and Security. Chairwoman Ramirez also suggested that other privacy principles may apply to cross-device technology, such as data minimization, accountability and data security. In particular, she expressed the view that companies should not retain data longer than necessary to achieve its purposes.
Chairwoman Ramirez called on companies to "rise to the challenge of fostering technological solutions to inform consumers, offer choices, and honor those choices." She highlighted the role of self-regulatory organizations such as the Digital Advertising Alliance (DAA) and Network Advertising Initiative (NAI) in developing standards to provide transparency and choice to users, while also noting that the FTC "will continue to monitor the marketplace and take action as needed."
Technological and Policy Perspectives on Cross-Device Tracking
The remainder of the workshop consisted of two panels moderated
by FTC staff, which examined the technological and policy
perspectives on cross-device tracking. The panels included
representatives from self-regulatory organizations, consumer
advocacy groups and academic researchers. The panelists largely
viewed cross-device tracking as a natural evolution from existing
practices, and therefore that existing FTC guidance and
self-regulatory codes may offer valuable notice-and-choice
frameworks. Nonetheless, several themes did emerge that focused on
how cross-device technology may differ from existing technologies
and present unique privacy and security issues for consumers.
Challenges to Consumer Transparency
There was general agreement among panelists that transparency is a
key issue. As with any new technology, panelists expressed concern
that consumers may be unaware of the cross-device technologies that
companies use to collect information about users. One panelist
noted that the traditional "silos" that consumers may
rely on to separate their online and mobile experiences—for
example between personal and business life—may no longer
meaningfully distinguish a user's online activities.
In response to questions about the steps that the industry is
taking to improve consumer transparency, representatives from the
NAI and DAA emphasized that they have released industry guidance
and provided technical solutions to help companies provide notice
and choice to consumers. For example, the DAA unveiled new guidance
on Monday that is titled the Application of the Self-Regulatory Principles
of Transparency and Control to Data Used Across Devices. Among
other things, the new guidance requires first- and third-parties to
comply with enhanced notice requirements under the existing DAA
Principles and to inform users of cross-device practices and
choices in their privacy policies.
Scope of Consumer Choice
Panelists also focused on the choices that are available to
consumers with respect to cross-device technologies. There was
agreement that consumers should be able to choose how their
information is collected and used across devices. However, there
was considerable disagreement regarding the scope of any opt-out
provided and the means that would be used to effectuate that
choice.
For example, the DAA's recent guidance requires that companies
extend user opt-outs only to the device from which a consumer has
opted out (e.g., no data from that device may be used on other
devices, and vice versa). However, some panelists suggested that
opt-outs should extend to all devices that the company reasonably
believes are associated with the device from which a consumer has
opted out, to the extent possible. The FTC did not signal a
preference for a single-device or multiple-device opt-out. Instead,
the FTC staff suggested that key considerations likely would be
whether a company has: (1) clearly disclosed the means through
which a consumer may opt out and the effect that such a choice
would have on the company's collection, use and sharing of
information about that user; and (2) that the company follow
through with its disclosures, so that they are accurate.
Role and Sensitivity of Personally Identifiable
Information
The panelists also considered the privacy and security risks that
arise when companies collect and share hashed email addresses
during the process of establishing authenticated connections among
devices. Ashkan Soltani, Chief Technologist at the FTC, asked
several questions that signaled that the FTC may consider the
extent to which technical measures (e.g., hashing) protect users
against the unlawful use or disclosure of information. For example,
the FTC may consider the strength of any hashing algorithm, the
retention period of hashed email addresses, and the contractual
restrictions in place to prohibit re-identification and further
disclosure of hashed personally identifiable information
(PII).
Although panelists disagreed over the benefits of hashing PII,
Jurgen Van Staden, the Director of Policy at the NAI, explained
that hashing nonetheless provides some key protections. In
addition, he noted that the NAI Code of Conduct requires procedural
and contractual protections designed to prevent re-identification
of hashed email addresses. Justin Brookman, Policy Director for the
Office of Technology Research and Investigation at the FTC,
suggested that perhaps the traditional distinction between PII and
non-PII is less relevant now, given the potential capabilities to
re-identify individuals.
Data Retention and Data Minimization
The panelists also discussed the technical solutions that could be
used to improve consumer privacy and security. While there was
disagreement over the risks that are associated with the collection
of information across devices, the panelists seemed to agree that
one of the most basic solutions to reduce risk is to discard
information after it is no longer needed for its intended purpose.
Some panelists pointed out that recent data breaches have not been
motivated by purely economic motives, and therefore data retention,
data minimization and data security are important issues in the
collection and use of cross-device technology.
Potential Misuse of Cross-Device Data
Finally, the panelists generally agreed that companies should not
use cross-device technology to target sensitive categories of
individuals without opt-in consent or engage in discriminatory
practices. Nonetheless, there was disagreement as to how those
sensitive categories or uses should be defined. For example, one
panelist believed that nearly any type of price discrimination
should be prohibited, but other panelists noted that individual
pricing offers were not necessarily harmful to consumers. These
issues likely will need to be developed over time with the
participation of the FTC and self-regulatory organizations.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.