FTC concludes DoubleClick investigation

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The Federal Trade Commission has ended its investigation of the privacy issues stemming from DoubleClick's purchase of Abacus Direct.

In a letter today included on its Web site, the FTC said the investigation was concluded because it saw no proof that DoubleClick used or disclosed personally identifiable information in violation of its privacy policy.

The FTC investigation began after privacy groups complained that DoubleClick's 1999 purchase of Abacus Direct in a stock deal that was valued at the time at $1 billion, would violate privacy rules. The complaint charged that DoubleClick's plan to combine its online profiling information with offline information gathered by Abacus Direct, violated consumers' privacy rights and DoubleClick's own privacy policy. In the face of a firestorm of opposition to its combining information, DoubleClick backed off a plan to possibly combine online and offline data. Combining online and offline data was one reason why DoubleClick had originally been interested in buying Abacus.

The company first delayed action, then subsequently announced it would hold off until industry standards could be set and that it would work with the Network Advertising Initiative, the industry organization of third-party Web servers.

In the letter to DoubleClick today, the FCC said the company had not combined personally identifiable information, and that while DoubleClick's Boomerang product uses profile information gathered from several Web sites to target consumers, the targeting is done without personally identifiable information.

The FTC also said DoubleClick had agreed to revise its privacy policy and would disclose the use of "Web bugs" to collect information about consumers.

Christine Varney, the former FTC commissioner who represented DoubleClick, praised the FTC's action. "The FTC spent over a year and an enormous amount of money and resources, investigating all aspects of this and it cleared DoubleClick," she said. "It's a great day for consumers as well as the industry. DoubleClick had maintained that they weren't merging information that was personally identifiable with non personally identifiable information. The investigation shows [DoubleClick] was true to their word. The FTC letter is at: http://www.ftc.gov/os/closings/staff/doubleclick.pdf

The FTC had been invesigating DoubleClick after a complaint was filed by the Electronic Privacy Information Center. "We are surprised and disappointed," said the group's executive director, Marc Rotenberg. "It's more of an issuance of clean bill of health than a response, to a complaint, that DoubleCclick, continued to revise its privacy policies It seems to me that the central issue, was completely sidestepped in their reply."

Copyright January 2001, Crain Communications Inc.

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