Privacy advocates, while agreeing with the importance of an advertising-supported Internet, slammed the paper. TPI is acting for the large Internet companies and telecom vendors that support it, said Jeffrey Chester, executive director of the Center for Digital Democracy, a privacy and digital rights group.

The paper also misrepresents the position of many privacy advocates, who are calling for Internet companies to inform consumers about data collection practices and give them control over how their data is used, Chester added. "No one's against online advertising," he said. "What we're saying is, there's a consumer and civil liberties balance, and weight should lie with the individual in the digital age, not with corporate data brokers."

The study also fails to distinguish among the several types of data being collected online, said Alissa Cooper, chief computer scientist at the Center for Democracy and Technology, a privacy and digital rights group. Some data collection can be fairly harmless, while some data is personal or can easily be linked to a specific user, she said.

"They kind of lump together all data collection in one bucket," she said. "There's a large about of gradation in data collection."

The paper also suggests that industry self-regulation in data collection could have negative effects, because online companies could no longer differentiate themselves based on their privacy protections.