Jonathan Mayer, a privacy advocate and graduate student at Stanford University, said negotiations are at a "standstill," with the two sides unlikely to bridge their differences on core issues.
The Federal Trade Commission first proposed a Do Not Track button in 2010. The concept is modeled on the agency's popular "Do Not Call" list, which allows consumers to opt out of telemarketing calls.
The button would not block all forms of online tracking; websites that users interact with directly, such as Facebook or Amazon, would still be able to track users' activities, for example. But by selecting the Do Not Track option, they would be able to prevent third-party ad networks from installing tracking files on their computers and tailoring ads to them based on their browsing history.
FTC Chairman Jon Leibowitz urged Web companies to voluntarily implement a Do Not Track option and warned that legislation could be necessary if they failed to act.
"Simply put, your computer is your property; no one has the right to put anything on it that you don’t want," Leibowitz said in March.
At the February White House event, all of the major Web browsers promised to offer a Do Not Track feature, and the Digital Advertising Alliance, a coalition of advertising trade groups, said that by the end of the year, they would stop displaying targeted ads to users who had selected the feature.
Companies and public interest groups began negotiating through the World Wide Web Consortium, an international standards-setting organization, to sort out the details of creating the Do Not Track system.
But advertisers have insisted on exceptions to Do Not Track for "market research," "product development," "system management" and other purposes.
Microsoft further complicated the negotiations in June when it announced that it would make Do Not Track the default setting on the newest version of its Internet Explorer browser.
Privacy advocates and government officials praised Microsoft, but advertisers panicked, worrying the move would suffocate Internet commerce.
The Digital Advertising Alliance advised its members last month to ignore Do Not Track signals from Internet Explorer users. The group argued that the Do Not Track request does not reflect the user's intent if it is on by default.
Leibowitz accused the advertising industry of backing away from its pledge to the White House. He told The Wall Street Journal last month that the industry’s proposal “is a loophole to Do Not Track that you could drive a virtual truck through.”
But Zanies argued that the advertising industry's agreement with the White House was only for a limited definition of Do Not Track.
"Certainly we intend to live up to our obligation to the White House," Zanies said.
Leibowitz has hinted that if the voluntary negotiations fail, policymakers could turn to mandatory regulations.
Reps. Edward MarkeyEd MarkeyBiden comments add momentum to spending bill's climate measures Overnight Energy & Environment — Starting from 'scratch' on climate, spending bill Overnight Health Care — White House boosts mask availability MORE (D-Mass.) and Joe Barton (R-Texas), the co-chairmen of the congressional Bipartisan Privacy Caucus, argue that self-regulation is insufficient for protecting online privacy.
"Until we have stronger privacy laws in place that mandate a company adhere to a consumer’s preference, especially for children and teens, consumers and their personal information will remain at risk,” the lawmakers said in a joint statement last month.