Is Self-Regulation Vital For Marketing?
Self-regulation is the American standard for promoting innovation and growth while reining in businesses using industry standards and enforcement. The rise of the internet created unique challenges, but this is not the first time Americans have addressed these challenges.
President Clinton, seeking the best route to handle these issues, commissioned the Information Infrastructure Task Force (IITF), which worked closely with industry and consumer groups and released two self-regulation recommendation reports.
The Task Force set basic principles on handling this emerging industry, and specifically warned against unnecessary regulations and bureaucratic procedures that could adversely affect the growth of electronic commerce. When government involvement is needed, the Task Force recommended that the intervention be minimalist, predictable and simple.
The Task Force also recognized the potential privacy concerns of the internet. It stated that commerce will only thrive if businesses properly balance the privacy rights with the free flow of information. The Task Force recommended industries implement notice of collection/use practices and choice to limit collection and use.
Under this backdrop of governmental support, self-regulation for consumer privacy issues increased and led to the rise of self-regulatory standards for privacy protections that mirror current federal privacy protections.
Self-regulatory groups benefit the consumer in a number of ways, such as offering more oversight. Because the group deals exclusively in a particular area, its in sync with the issues unique to that industry. It can move faster and provide clearer industry-specific guidance tailored to the industry needs and developments.
The Direct Marketing Association (DMA), for example, is a leading voice on direct marketing in the US and is in tune with the issues that can impact the industry.
Privacy developments are central to a lot of recent DMA activity as they work to promote the responsible use of data for marketing purposes. The DMAs Guidelines for Ethical Business Practices covers best practices for marketing and online marketing, but also address privacy concerns such as proper collection, use and choice.
The DMA also monitors legal and regulatory developments, regularly informs members of these developments, and makes itself available to help answer any questions. Members of the DMA are subject to sanctions by the DMA for non-compliance.
The self-regulatory principles of notice and choice are working, and the marketing industry will continue to refine these principles as the industry changes.
Responsible marketers already act ethically by using consumer data responsibly: for marketing purposes only and building privacy by design into their products and services.
With the emergence of the digital age, we are struggling to define the best ways to balance innovation and growth while protecting consumer privacy. All the signs point to self-regulation.
Segmented federal and state laws fail to capture issues associated with emerging technologies. Agency actions usually fail to take into account the unique qualities of the marketing internet economy and can potentially harm the internet by creating unnecessary regulations and bureaucratic procedures, which is in direct opposition to the recommendations made by the Information Infrastructure Task Force.
By having industry-created guidelines we guard against confusing or burdensome regulations or laws. In addition to providing guidance, self-regulatory groups provide a direct route for supervision and redress.
The ultimate goal should be to find the line where consumer privacy is protected and the industry can function at maximum efficiency. The cost of protecting privacy is not the cost of doing business. These are not mutually exclusive; industry can achieve both through self-regulation.
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