- FTC Issues 'Last Chance' To Ad Industry On Behavioral Targeting

David Kaplan
Thursday, February 12, 2009; 12:07 PM

The Federal Trade Commission is putting the advertising industry on notice: either implement stronger privacy protections when it comes to behavioral targeting or we will do it for you. In the FTC's 48-page Staff Report on Behavioral Advertising (PDF), the commission includes a set of four revised principles, which are currently non-binding. They are:

?Transparency and Consumer Control: Every website that uses behavioral targeting should clearly and concisely spell out what they're doing. The FTC recommends that users be given the simple method to opt-out of the site's targeting tools. Industr

?Reasonable Security, and Limited Data Retention, for Consumer Data: The document states that "Companies should also retain data only as long as is necessary to fulfill a legitimate business or law enforcement need." If the FTC decides to take a stronger regulatory hand on this, the question of just how long a site "reasonably" needs to hold on to user info could be a major sticking point.

?Affirmative Express Consent for Material Changes to Existing Privacy Promises: In other words, a company must keep its promises that it makes with consumers when it comes to protecting their data. If they get bought or merge with another company, those pledges still hold, unless consumers agree to the changes. If the company revises its policies on privacy, they must receive users' consent before implementing the new rules.

?Affirmative Express Consent to (or Prohibition Against) Using Sensitive Data for Behavioral Advertising: If companies want to collect "sensitive" personal data, it must get users' permission before, not after, it starts collecting. Release

?Industry groups unite on preserving self-regulation: In response to the FTC's ongoing scrutiny of behavioral targeting, four the largest advertising trade organizations are stepping up their efforts to maintain self-regulatory policies that were set over a year ago by the Federal Trade Commission. The American Association of Advertising Agencies (4A's), the Association of National Advertisers (ANA), the Direct Marketing Association (DMA), and the Interactive Advertising Bureau (IAB) have formed a group designed to maintain the FTC's December 2007 ruling to let the ad industry police itself. So far, the Council of Better Business Bureaus is also on board with the trade groups' collective initiative. But as a new administration settles into office, and concerns over behavioral targeting made its way into Congressional hearings last summer, it seems increasingly likely that some new laws or regs will eventually be handed down. Considering that a number of states, like New York and Connecticut, have been taking their own approach to ad targeting, a single federal standard might eventually be welcomed by the industry?so long as it doesn't further depress an industry that's already suffering the effects of the wider economic downturn. Release


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