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Companies Working Towards More Transparent Web Tracking

Posted on: Thursday, 2 July 2009, 11:40 CDT

New policies are being enacted by companies that track consumer behavior on the Internet for advertising purposes, as an attempt to self-regulate and make such practices more transparent, The Associated Press reported.

However, one consumer group said the changes don't go far enough, and that some companies will still collect extensive profiles of people without their complete consent or knowledge.

Now that Congress and the Federal Trade Commission are more thoroughly examining online behavioral advertising, the new guidelines on Thursday will be an effort to represent the industry's attempt at self-regulation.

As consumers visit different Web sites and make online purchases, companies can track the sites they visit and, over time, profiles of consumer interests can be sold to advertisers who want to pitch their products to those people who fit into their certain demographics.

This tracked information can include anything from a best guess at someone's ethnicity, income or educational level, to age and hobbies.

The new policies will now urge companies to more clearly inform consumers when they're being tracked and tell them how Web tracking works. It will also offer Web surfers an easy way to opt out of being tracked at all.

Starting next year, industry groups will monitor whether companies are breaking the guidelines and report violators to federal agencies.

Trade associations representing 5,000 companies created the guidelines. The consortium consists of the American Association of Advertising Agencies, Association of National Advertisers, Direct Marketing Association, the Interactive Advertising Bureau and the Better Business Bureau. Its members are some of the nation's largest companies, including Google, General Electric, Microsoft Corp, Coca-Cola Co and Procter & Gamble.

Uniform links or clickable icons will take consumers from a Web site or an ad itself to a disclosure page, the groups said.

Companies are also asked to provide "reasonable" security for the data they collect and to limit how much data they retain. Consumer approval is advised before companies make material changes that would erode privacy protections.

Certain sensitive data such as children's personal information, financial data and medical records must have more protection under the guidelines.

Stu Ingis, a partner at Venable LLP, the law firm hired by the groups to undertake this effort, called it “a very big leap forward".

The online ad industry's promise to regulate itself through the new guidelines is designed to undercut the federal government's increased interest in overseeing online behavioral advertising, according to Jeff Chester, executive director of the Center for Digital Democracy.

He said the online ad industry is terrified that regulators and lawmakers now realize that people's data are being collected without them being aware and in control of it.

The groups should not only protect children's private information, but also teens', Chester said. He also suggested that all health and financial data should be covered, rather than just certain kinds.

He stressed that Congress needs to create fair rules under which online marketing can thrive but consumers have greater control on how the information collected is being used.

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On the Net:

• Congress
• Federal Trade Commission

Source: redOrbit Staff & Wire Reports

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