Katy Bachman

Google, Facebook, Twitter and other Internet ad companies no doubt saw Congress coming when they reinvigorated industry efforts to combat malvertising and protect consumers.

A new report by the Senate Homeland Security Committee’s permanent subcommittee on investigations concluded that the online advertising industry contains “significant vulnerabilities” that cyber criminals exploit to initiate malware attacks against consumers.

The report was initiated by ranking member Sen John McCain (R-AZ). The report, “Online advertising and hidden hazards to consumer security and data privacy,” was released just ahead of the subcommittee’s hearing, where you could find representatives from Yahoo, Google, the Online Trust Alliance, the Federal Trade Commission, as well as Lou Mastria of the Digital Advertising Alliance.

In some instances, clicking the play button would initiate a pre-roll ad on YouTube or Yahoo that could deliver malware to consumers’ computers, the report found. Sites that consumers would expect to be safe, including The New York Times, Major League Baseball, and the San Francisco Chronicle were found to host ads with malware, many delivered by third-party ad networks.

Reacting to the recent hate crime at two Jewish centers in Kansas City, Sen Ed Markey (D-MA) and Rep Hakeem Jeffries (D-NY) introduced a bill to update the government's 20-year-old report on hate speech in the media.

The Hate Crime Reporting Act of 2014 would examine the role of the Internet and other telecommunications in encouraging hate crimes based on gender, religion, ethnicity, or sexual orientation, and would provide recommendations to address such crimes. Congress defines a hate crime as a "criminal offense against a person or property motivated in whole or in part by an offender's bias against a race, religion, disability, ethnic origin or sexual orientation."

Broadcasters are having a tough time in Washington. A number of efforts are aimed straight at the business from the Federal Communications Commission's recent decision to tighten ownership rules and claw bag big chunks of the broadcast spectrum for wireless, to a very vocal pay TV lobby pushing hard on Congress to reform retransmission consent.

With so much going against them, it's easy to conclude that the broadcasting lobby, once the most powerful lobby on the Hill, may be on the outs. Certainly the medium has lost the glamour crown to the Internet. But calling the broadcasting industry a dinosaur may be a premature conclusion. Wrapping up the industry's national convention in Las Vegas, Gordon Smith, president and CEO of the National Association of Broadcasters, remains confident he can turn things around.

"While I may be frustrated, I'm not discouraged because I know how this ends," Smith said. Smith, a former Senator, spent the week talking with broadcasters, FCC commissioners and staffers, even holding a closed-door meeting with FCC chairman Tom Wheeler, who right now is enemy no. 1 among broadcasters. Despite broadcaster sentiment, Smith, ever the diplomat, is taking the high road. He's betting Chairman Wheeler, a former cable and wireless lobbyist, might see broadcasting differently after his time at the NAB's annual convention.

How’s this for an online racket? Surreptitiously grab information from Facebook to create tens of millions of profiles labeling people a "jerk" or "not a jerk" and then charge people $30 to revise their online profiles.

The deceptive scheme didn't sit well with the Federal Trade Commission, which filed an administrative complaint against Jerk, LLC and the operator of the website, John Fanning, for misleading consumers that the content on the site had been created by other Jerk.com users when in reality it had been harvested from Facebook without their permission.

Between 2009 and 2013, Jerk.com operated a social networking website that invited users to "post a jerk." Although the site claimed it contained only user-generated content, in fact the vast majority of the 73 million profiles were created by Jerk using information from Facebook. What's even more troubling, some of the profiles of children were designated as private on Facebook.

The FTC is seeking an order barring Jerk.com from using the personal information improperly obtained and requiring Jerk.com to delete the information.

A White House survey that asks consumers for their opinion about big data and privacy may yield a few political talking points but not much meaningful or useful data, experts say.

The survey popped up on the White House's Web page complete with a video message from John Podesta, counselor to the President. Podesta has been holding meetings with a number of stakeholders in the debate, including the advertising community and, most recently, tech CEOs.

The survey asks three broad questions: "How much do you trust [a list of] institutions with your data? How much do these types of data [i.e., audio, location] collection concern you? How much do the following data practices [i.e., collection, storage] concern you?" Experts say the questions, focused on feelings of "concern" and "trust," lack context to elicit any real understanding.

"The questions are extremely broad," said Professor Joseph Turow, the associate dean for graduate studies of the Annenberg School for Communication at University of Pennsylvania. "I don't know what I would do with the answers. It's hard for me to believe this is a serious survey."

Disney is under scrutiny by the Federal Trade Commission for flunking the ABCs of children's online privacy laws.

The company first came under review following a complaint filed last December by the Center for Digital Democracy that alleged Marvelkids.com failed to obtain parental consent from children under 13 prior to tracking and collecting personal information about them. Although Disney made some changes in its privacy policy two days later, the CDD said in an amended complaint that the changes were "insufficient." "Disney has cavalierly disregarded some of the basic principles," said Jeff Chester, executive director of the CDD.

"The biggest kids entertainment company is thumbing its nose at kids' privacy. We expect action." Because Disney substituted its companywide policy on Marvelkids.com, the CDD suggested the FTC broaden its inquiry to include all of Disney's kids-directed sites. CDD identified three places where it says Disney did not stick to the letter of the law for children's online privacy.

First, the Marvelkids.com site does not have a direct link on the homepage to the online policy as spelled out in the FTC's guidance. Second, the CDD alleges that Disney's notification about what information third parties are collecting fails to meet the clear and prominent standard and is inaccessible because it is buried in fine print in the "persistent identifiers" section of the policy, making it "not easy to locate." Finally, the CDD also accuses Disney of allowing third parties to collect personal information for purposes other than the internal operations of the website. Forty-three different companies are listed on the website as collecting persistent identifiers.

Broadcasters have launched a counterstrike against the Federal Communications Commission's proposal to restrict TV joint sales agreements by asking the agency to look into similar sales arrangements used by the largest pay TV providers.

The FCC is scheduled to vote at the end of March 2014 on FCC Chairman Tom Wheeler's proposal that would effectively eliminate JSAs because they would push station groups over the ownership limits in nearly 100 small markets. In comments filed with the FCC, the National Association of Broadcasters calls the "interconnect" advertising activities by cable, satellite and telephone companies "collusive."

Through NCC Media, multiple TV providers rely on one sales team to sell local and national advertising time across all the pay TV providers in a single market; NCC just recently added Dish to its lineup of pay TV inventory. So, the NAB reasoned, if the FCC is going to crack down on local market joint sales agreements between two small TV stations, shouldn't the agency also take a look at the local sales arrangements between pay TV providers?

In a perfect world, the Network Advertising Initiative's annual compliance report would have come out before 60 Minutes trashed the data tracking and collection on the Web for interest-based advertising.

The report details how 88 Internet ad networks like Google, Yahoo, AOL and Microsoft comply with the organization's strict self-regulatory privacy code to ensure that consumer choices are honored and data privacy is protected. It dispels, in part, many of the myths that tracking on the Web is completely lawless and unregulated. While the 88 ad networks don't cover all of the ad networks that place advertising on the Web, the NAI's members are the largest and represent a significant portion of the marketplace.

In 2015, the report will include 100 ad networks. To comply, ad networks met very specific standards of the organization's self-regulatory code, which requires the companies to publicly post data collection and retention practices and give consumers the opportunity to opt out of tracking. Companies also agree to only use data for marketing purposes and comply restrictions with the restrictions on personally identifiable and sensitive information, such as health.

GroupM's John Montgomery is headed for the White House on March 13 along with about 20 others in the Internet advertising business, including Dick O'Brien of the 4A's and the IAB's Mike Zaneis, to talk about big data and privacy issues.

The meeting is one of a series set up by White House advisor John Podesta, who was tasked by President Barack Obama with conducting a comprehensive review of big data and privacy in the wake of the growing controversy over government surveillance.

"I'm looking at this meeting positively," said Montgomery, GroupM's chief operating officer and chairman of the 4A's media policy committee. "I'm hoping they are [going] to listen to how data is being collected for advertising and how it helps us make decisions and spur economic growth. We'll also emphasize how the ad choices program has helped us treat privacy, that we do it responsibly and have put protections in place."