The online-ad industry may have an ally in its smoldering battle against Microsoft.

Microsoft set the industry ablaze when it revealed last week that the latest version of Internet Explorer would ship with "Do Not Track" functionality turned on.

In response, leaders of industry trade groups that make up the Digital Advertising Alliance decried the move in public statements and now one of the main international standards organizations for the web is preparing to label Microsoft's browser as "noncompliant," setting up a showdown between Redmond, web-standards creators and the rest of the online-ad ecosystem.

The closely-watched "tracking protection" working group within the standard-setting World Wide Web Consortium, or W3C, reached consensus on a call on Wednesday that browsers that automatically opt users out of tracking don't fit its definition, and won't get the group's seal of approval, according to the group's co-chair and Mozilla privacy researcher Aleecia McDonald. In effect, the group is saying that compliance means that a browser should give a user a choice whether or not to be tracked before it sends out any signal to websites saying "this person doesn't want to be tracked" or "this person wants to be tracked."

The irony is that Microsoft is a member of the Digital Advertising Alliance, has employees in the W3C working group, and has for years participated in the online-ad industry's attempt to regulate itself. By breaking from the self-regulatory program, Microsoft is breaking with industry consensus, and some fear, threatening the entire process altogether.

"The consensus is that a user agent [a browser, in this case] cannot turn on a default without a user choice," Ms. McDonald told Ad Age in an interview Wednesday.

"Microsoft is not currently out of compliance," she added, "but what they're doing now will not be compliant" when the working group publishes its final recommendation in the coming months.

The working group consists of privacy researchers, consumer privacy advocates, a handful of employees from trade groups such as the Interactive Advertising Bureau and the Online Publishers Association, and privacy and engineering execs from companies such as Yahoo, Google, Adobe, and Apple.

In a statement emailed to Ad Age , Microsoft Chief Privacy Officer Brendon Lynch said: "We are engaged with the W3C, as we are with many international standards bodies. While we respect the W3C's perspective, we believe that a standard should support a privacy by default choice for consumers."

Until now, the online-ad industry had been patting itself on the back, first for achieving industry consensus on the definitions of tracking and then successfully convincing regulators it could put its own system in place that would give consumers the ability to opt out of ad targeting. But Microsoft's move throws a wrench into the gears, threatening years of negotiations, hearings, working groups and negotiations with privacy advocates.

What IE 10's W3C noncompliance would mean for web publishers, ad networks, and advertisers that want to be compliant is still not clear. The working group hasn't reached a consensus on what a website that wants to be compliant with the W3C should do when pinged with a Do Not Track signal sent from a noncompliant default setting. Working group members from companies such as Yahoo, Adobe and Google are arguing that websites would have the right to reject a Do Not Track signal sent from a noncompliant browser.

"At some point we need to draw line in the sand to call out bad actors as 'bad'," Yahoo privacy exec Shane Wiley wrote in an email to the working group earlier this week. "We've agreed users should expressly activate DNT on their own ... If bad actors cross that line ... then servers should have the flexibility to respond appropriately."

The DAA itself is taking a similar stance. "I can't imagine a scenario where we are going to be supporting or honoring browsers that had advertising limited by a setting as a default," Stu Ingis, counsel for the DAA, said in an interview.

But that stance, of course, would put major advertisers in the unenviable and tenuous position of having to indirectly reject a consumer's request for privacy if it was set by default -- something that at least one consumer advocate in the W3C working group says he will not let go.

"Are the leading brands going to say to millions of consumers, we don't care about your privacy preferences?" said Jeff Chester, exec director for the Center for Digital Democracy.

In the meantime, the DAA has largely put on hold talks it was having with web-browser makers to try to come to its own agreement on a unified technical implementation of a Do Not Track header for browsers.

"We always hoped we could find a mutually beneficially solution so we could implement W3C standards with the success of the existing DAA program," said Mike Zaneis, senior VP and general counsel for the IAB and a DAA board member. "But the reality for the IAB and the DAA is there is no W3C standard [right now] so we can't say we recommend or require our companies to follow a W3C standard."

Perhaps most importantly, the W3C working group has still not agreed on a definition for Do Not Track. Is it "do not collect" data as consumer and privacy advocates are pushing for, or only "do not target " which groups such as the DAA are supporting?

There was some strategy to consumer advocates' concessions around browsers not being able to set Do Not Track by default and that first-party publishers could still personalize web experiences for individual users. In exchange, they want to push for a strict definition of Do Not Track that largely prohibits data collection by third parties in addition to the use of this data to target ads to consumers.

Members of the W3C working group are ironically scheduled to meet at Microsoft's headquarters in two weeks for a pre-planned three-day meeting.

In an email to the working group titled "Seattle Preparations," Ms. McDonald laid out expectations for that meeting.

"It would be useful for you to understand where your organization stands on predictable key issues," she wrote. "In many places we are seeing executives getting involved in new ways. Please make sure you have as much information as possible about what your organization can live with before you walk through the door. We are looking for major decisions."