Feb. 12 (Bloomberg) -- The Federal Trade Commission’s new Internet-advertising guidelines don’t put enough pressure on companies to protect consumer data used in targeted marketing campaigns, privacy-advocate groups said.

The agency released the voluntary standards today to guide Web marketers’ efforts at self-regulation. The FTC report urged advertising providers such as Google Inc. to boost online privacy by gaining consent before gathering personal data and limiting the amount of time they hold onto the information.

The agency is prodding the industry to beef up safeguards for Web users as companies such as Google, Microsoft Corp. and Yahoo! Inc. compete for a bigger share of the market for search and display ads. While industry groups said the government should continue to let Web companies police themselves, consumer advocates said the FTC needs to call for new privacy laws.

“The time for baby steps to protect online privacy is long past,” Jeff Chester, executive director of the Center for Digital Democracy in Washington, said on a conference call with reporters. “The commission failed to protect consumers here.”

The World Privacy Forum and Washington-based Electronic Privacy Information Center were among other groups on the call.

Google handled 64 percent of U.S. searches in December, while Yahoo had 21 percent and Microsoft had 8.3 percent, according to ComScore Inc. of Reston, Virginia.

The FTC said in its report that Web marketers should also take steps to increase peoples’ control of their information, which the privacy groups said needs to be enforced through laws.

“Industry needs to do a better job of meaningful, rigorous self-regulation, or it will certainly invite legislation by Congress and a more regulatory approach,” Jon Leibowitz, an FTC commissioner, said in a statement.

Tracking Web-Surfers

Web marketers also should provide clearer information about how they track consumers’ Internet-surfing habits and what they do with that data, the FTC said.

“The FTC principles underscore that in a fast-evolving space like the Internet, a self-regulatory approach is the best way to protect consumers and promote innovation,” Pablo Chavez, Google’s senior policy counsel, said today on the company’s policy blog.

The Association of National Advertisers, the Interactive Advertising Bureau and three other trade groups announced last month that they are working together to craft voluntary privacy standards for all companies involved in Web advertising.

“We’re trying to match the call by the FTC for comprehensive self-regulation,” Mike Zaneis, vice president of public policy at New York-based IAB, said today in an interview. With the global economic slump, “there could not be a worse time for the government to try to regulate the industry.”

Google bought DoubleClick Inc. last year for $3.24 billion to bolster sales of Web ads with pictures and videos.

The market for search ads will probably grow about 10 percent this year, compared with 5 percent growth for display ads, according to Susquehanna International Group. The search-ad market grew 25 percent last year, while the display market increased 18 percent.

To contact the reporter on this story: Molly Peterson in Washington at mpeterson9@bloomberg.net

Last Updated: February 12, 2009 15:24 EST