A group of Internet advertisers pledged yesterday to give computer users more say over the information collected in profiles about their online activities, inaugurating a new site on the World Wide Web to underscore their commitment.
At the same time, consumer advocates expressed skepticism about the claim and called on the Federal Trade Commission to block the practice known as "profiling," saying the industry's growing collection of information about consumers poses a threat to online privacy.
The issue arose yesterday as the FTC and the Department of Commerce held a day-long seminar about profiling, which involves the collection and analysis of data about where potential customers go online, what they buy and the sorts of ads they express interest in.
Officials are examining whether companies employing such techniques adequately inform people about their practices and use the information properly. One concern is the widespread use of "cookies," a software tactic that enables advertising companies to track even those computer users who have not agreed to share personal information.
Advertising companies use insight derived from such information to deliver customized ads to computer users cruising the Web.
Industry officials and many analysts believe the future of electronic commerce and the $3 billion online ad business depends on their ability to personalize sales and target advertisements through these techniques. They stressed that profiles often contain no names or other personally identifiable information.
But in response to consumer concerns--and recent questions from government officials--industry leaders said they would take steps to be more forthcoming about what they do. DoubleClick Inc., MatchLogic Inc., AdForce Inc. and six other companies--which they said handle more than 80 percent of the advertisements that appear on the Internet--agreed to provide notice to Internet users about what they collect.
They also agreed to give individuals the right to say no to profiling and to permit oversight by new groups such as BBBOnline and TrustE, which review and endorse the privacy practices of Web sites. The industry group started a Web site at www.networkadvertising.org to make it easier for individuals to "opt out" of profiling, as part of what it called the Network Advertising Initiative.
"We have heard consumer concerns and we are committed to addressing them," said Elizabeth Wang, general counsel for DoubleClick, which sells ads to some 1,400 Web sites.
Consumer and privacy activists dismissed such measures as inadequate. They asked the FTC to halt all online profiling and begin investigating it. The Electronic Privacy Information Center, the Center for Media Education and other groups also urged state attorneys general to take action, saying that profiling is unfair and deceptive.
"There's a growing impatience," said Jason Catlett, president of Junkbusters Corp., a privacy advocacy and consulting firm in New Jersey. "The assembling of the enormous profiles is, on the face of it, unfair."
David Medine, the FTC's associate director for financial practices, said his agency applauds the initiative by the industry but would need to study the proposal to determine if it adequately addresses consumers' concerns.
"Essentially we are studying it," Medine said. "Anything that has a direct impact on consumer confidence with electronic commerce is important to us."