Originally endorsed by the Federal Trade Commission and consumer groups as the answer to online privacy concerns, the implementation of Do Not Track (DNT) now appears to have stalled.

The concept of Do Not Track – modeled on the Do Not Call registry – gained traction in December 2010 when the FTC released its draft privacy report, in which it recommended the idea, but problems have arisen regarding its implementation.

A working group created by the World Wide Web Consortium (W3C) to address the issue has struggled to reach an agreement about how DNT should be defined and exactly what features it should include. Due to a lack of consensus, the group recently released a statement that its new goal was simply to reach a standard that “raises the least number of objections.”

Several legislators have also recently expressed their concern about the viability of DNT and the FTC’s involvement with the W3C. In response, FTC Chairman Jon Leibowitz said the agency will continue to work towards implementation of a DNT standard and will support the W3C’s process. “The standard-setting work of the W3C . . . is another important means for giving consumers greater control over the tracking of their online activities,” he wrote.

Jumping to the defense of the FTC – and DNT – Sen. John Rockefeller (D-W.V.) sent a letter to the agency encouraging it to continue working with the W3C and pushing for the DNT Registry. Sen. Rockefeller, who introduced federal DNT legislation in May 2011, also called the industry’s self-regulatory program a “failure.” Rockefeller wrote, “I have long expressed skepticism that private companies are capable of collectively producing and abiding by meaningful standards that protect consumers. If the advertising industry cannot be coaxed into living up to its commitment and adopting robust voluntary DNT standards, I believe it will only highlight the need for Congress to act.”

The DNT debate has gained attention in the private sector as well. Several Internet browser providers – including Apple, Google, Microsoft, and Mozilla – jumped on the FTC’s report by creating Do Not Track mechanisms. Microsoft, in particular, ignited a firestorm earlier this year when it announced that it would make DNT the default option for the next version of its Internet Explorer browser, IE 10. Since that time, however, criticism against Microsoft has mounted, culminating in a recent letter from the Association of National Advertisers that was signed by the chief marketing officers of more than 30 companies, including General Electric, Ford, Kraft, Procter & Gamble and Unilever. “Microsoft’s action is wrong. The entire media ecosystem has condemned this action,” the authors wrote. “In the face of this opposition and the reality of the harm that your actions could create, it is time to realign with the broader business community by providing choice through a default of ‘off’ on your browser’s ‘do not track’ setting.”

The Digital Advertising Alliance (DAA) also released guidelines that notified members that they could ignore the DNT signal on the Internet Explorer browser. Because the default setting is “machine-driven,” the DAA reasoned, members need not treat a default as a choice made by a consumer not to receive targeted ads. “The DAA does not require companies to honor DNT signals fixed by the browser manufacturers and set by them in browsers. A ‘default on’ do-not-track mechanism offers consumers and businesses inconsistencies and confusion instead of comfort and security.”

Why it matters: The recent announcement by W3C highlights the uncertainty surrounding the future of DNT and behavioral advertising. Privacy advocates have accused the advertising industry of stalling, while industry members have countered that self-regulation of behavioral advertising has proved effective to date. “It’s working very well,” Mike Zaneis, general counsel for the Interactive Advertising Bureau, recently told The New York Times. “Why don’t we give that a chance to succeed?”