File this under "unintended consequences." Producers and distributors of online advertising argue that a proposal for a "Do Not Track" list, submitted last week to the Federal Trade Commission (FTC) by nine privacy groups, could actually increase the amount of advertising that consumers see online.

Last week, the FTC sponsored a town hall-style meeting entitled "Ehavioral Advertising: Tracking, Targeting, and Technology." Prior to the meeting, the privacy organizations -- including the Center for Democracy and Technology, the Electronic Frontier Foundation, and the Privacy Rights Clearinghouse -- sent a letter to FTC Secretary Donald S. Clark suggesting the Do Not Track list and calling for additional privacy safeguards for consumer data.

Several Web advertising executives later told Business Week that if the FTC were to implement such a list, it would restrict the ability of Web sites to sell targeted ads that typically generate higher revenues for the site; instead, Web sites would either have to charge for their online resources or sell larger quantities of lower-priced, general audience advertising.

Disingenuous Argument?

"That's a disingenuous argument," said Jeff Chester, the founder and executive director of the Center for Digital Democracy. "All that I can say is that the industry's spin doctors haven't gotten enough sleep lately. The whole point of online advertising is targeting of consumers; no one is going to pay for general ads that go into cyberspace. Even if a list like this is created, Web sites and advertisers will still find some way to track and target surfers."

Chester said that he and his group worked with the different privacy organizations on the proposal to the FTC, but ultimately decided not to sign it because he did not think that it went far enough in protecting consumer privacy online.

"It sounds appealing," Chester said, "but ultimately, the Do Not Track list would not protect consumers. I do agree with industry that it would make matters worse, but not because it would increase advertising. It would make matters worse by effectively condoning practices already underway that collect every digital bit of our lives."

Policy-Based Solution

Chester argued that what is needed is not a temporary fix like the Do Not Track list, but rather legislation that establishes a strong limitation on data collection in the first place. He also said that the FTC needs to take a more active role in protecting online privacy.

"The FTC has been in deep-sleep mode since the start of Internet," Chester said. "The Commission has been living in a kind of digital Brigadoon, emerging once every decade or so to confront market realities."

Chester said that the Center for Digital Democracy will continue to pursue a broader policy-based solution to the problem of consumer privacy, with an emphasis on protecting consumer privacy when data is being collected, rather than attempting to control its later use in applications such as advertising.