FTC's report on online profiling a coup for ad-servers

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In a report issued July 27, the Federal Trade Commission unanimously supported a self-regulatory proposal developed by the Network Advertising Initiative, a coalition of third-party ad-servers such as DoubleClick, 24/7 Media and Engage. However, the FTC also called for Congress to enact legislation to provide consumer privacy protection as a complement to the NAI proposal. Such legislation would guarantee compliance by non-NAI members, which make up about 10% of the network advertising industry. NAI members agreed to put their self-regulatory principles into effect while Congress considers the FTC's recommendations regarding online profiling.

Among other measures, the NAI's proposal calls for no collection of sensitive personally identifiable information; clear and conspicuous notice and choice on publishers' Web sites when non-personally identifiable information is being collected via cookies for online preference marketing; the requirement that consumers be able to opt to have personally identifiable information merged with previously collected non-personally identifiable information; and the requirement that consumers be given a chance to opt out of having personally identifiable information linked with prospective non-personally identifiable information. Privacy advocates decried the FTC's vote endorsing the proposal, saying it didn't go far enough to protect consumers' online privacy.

"The FTC is ratifying a very invasive business practice,'' said Marc Rotenberg, executive director of the Electronic Privacy Information Center. Jason Catlett, president of Junkbusters Corp., said, "It's an unreasonable burden to expect consumers to opt out'' of any data collection. Mr. Catlett added that the proposal provides no opportunity for consumers to access or destroy all information about them that is being collected if they so choose.

Copyright July 2000, Crain Communications Inc.

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