WASHINGTON, DC - After a Wall Street Journal report this week indicated how travel software company Orbitz often displays more expensive hotel options in search results for Mac users than for PC users, U.S. Senator Jack Reed (D-RI) is asking the Federal Trade Commission (FTC) to take a closer look at the issue of digital privacy and the use of predictive analytics software in online advertising.

The Wall Street Journal notes: “The sort of targeting undertaken by Orbitz is likely to become more commonplace as online retailers scramble to identify new ways in which people’s browsing data can be used to boost online sales.”

Reed, a member of the Senate Banking Committee, says that while there do not appear to be many regulations regarding online companies tailoring search results for Mac users, the practice raises important privacy concerns and could discourage e-commerce if consumers feel they are being manipulated or unfairly directed to higher prices.  Or, if the practice is widespread, it could discourage people from using certain operating systems to shop online.

“There is a long tradition of trying to tailor marketing approaches to individuals.  But we are entering a brave new world in terms of the information marketers can use to target online advertising.  It is important to ensure consumers are protected from being unknowingly targeted or unfairly steered toward a bad deal.  This type of practice should be part of the national discussion on consumer privacy,” said Reed.  “The question boils down to: Is there enough disclosure, transparency, and consent in the system to ensure consumers are being treated fairly?  And are there any steps we can take to ensure consumers are not being disadvantaged?”

The text of Reed’s letter to the FTC follows:

Dear Chairman Leibowitz:

I write regarding an article in today’s Wall Street Journal that reported on an advertising strategy being used by online travel agencies.

The article described a practice that some online travel agencies are apparently using to direct consumers to different search results based on whether they are using Mac or PC computers, including directing Mac users to costlier travel options.  This practice could put some consumers who are looking for travel deals at a disadvantage, while also raising broader concerns about the use of consumer data for marketing purposes.  As such, I respectfully request your responses to the following questions:

1.            Are such advertising strategies compliant with current regulations regarding fair marketing practices?

2.            Are there any steps the Federal Trade Commission (FTC) has taken or can take to ensure that consumers are not being disadvantaged by such practices?

3.            What is the FTC doing to ensure that consumer information that is collected online, including information about a user's computing platform, is being used appropriately?

I appreciate the work the FTC has undertaken to ensure that consumers are treated fairly in the marketplace.  Thank you for your attention to this matter, and I look forward to your response.

Sincerely,

Jack Reed