Companies Fear, Consumer Advocates Praise 'Do-Not-Track' Proposals

If web companies heed recommendations by the Federal Trade Commission and allow consumers to opt out of online tracking, there's a good chance people will use the feature -- and that may be bad news for those companies' bottom line, a top tech market analyst said.

The FTC called on companies to establish "do-not-track" options. The option would prevent websites from tracking users' online habits, which marketers use to create targeted ads, and companies use to offer personalized services. Many people underestimate the impact of widespread do-not-track options on the companies that use the information, Washington Research Group's Paul Gallant said in an analysis. "The key is consumers' uptake of 'do-not-track' over the next nine months - the more widespread it becomes, the greater the risk to display ad firms (ValueClick, Google, Yahoo, AOL) due to a smaller universe of Internet users reachable via behaviorally targeted display ads," he wrote. While many sites have offered do-not-track features, they have not been enforceable.

The Information Technology and Innovation Foundation echoed those concerns, calling the FTC's proposals "misguided."

The Direct Marketing Association also called for balance. There is no harm in companies providing their customers with marketing that is customized to their interests, DMA vice president Linda Woolley said.