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Behavioral targeting comes under fire

FTC'S SELF-REGULATION PLAN

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The FTC's final recommendations concerning self-regulation, which could come as early as this fall, would urge clearer privacy disclosures, more viewer control over opt-out choices, greater security of consumer data and full disclosure on how personal data may be used. Meanwhile, Congress is investigating to determine if there is a need for federal restrictions. In July, the U.S. House Committee on Energy and Commerce began a probe into the data collection practices of Internet network operators, requesting information from 34 companies, including AOL, AT&T, Cablevision, Google, Microsoft Corp. and Yahoo. The committee also looked into a new tracking technique known as “network-based tracking” or “deep-packet inspection” (See sidebar, this page). Attention focused on a version of that technology from Nebu-Ad Inc. So intense was the scrutiny that this month a number of NebuAd customers canceled trials of the technology in which they were engaged—tests that were conducted on Web surfers without their knowledge. Bob Dykes, the company's founder and CEO, resigned. It's possible that Congress will leapfrog the FTC's self-regulatory guidelines and impose legal restrictions on behavioral targeting. “That's my overall concern about legislation,” said Mark Sableman, a partner with law firm Thompson Coburn and general counsel for American Business Media. “When people are spooked about privacy, a law could get laid down too broadly, restricting information,” Sableman said. On ABM's behalf, Thompson Coburn has filed comments with the FTC urging studies on the supposed harm of target advertising, rather than having the commission rely on anecdotal complaints. The law firm also recommended that the FTC distinguish between business and consumer advertising. Sniffing the winds of change, some major brands already are taking voluntary steps toward self-regulation before the FTC or Congress acts. Last week, search giant Google announced it was reducing the amount of time that it would store personal data gathered from users' Web surfing habits, a move the company attributed to improving its privacy policies. Google had been storing such data for 18 months, but will now trim that to nine. Earlier this summer, in response to the congressional probe, Yahoo said it would allow viewers to opt out of targeted advertising on Yahoo.com. Microsoft Corp. already allows users to shut off targeted ads. M
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