Online advertisers get last chance on self-regulation

February 13, 2009

Online advertisers get last chance on self-regulation The Federal Trade Commission has backed the principle of self-regulation for online advertisers. But some commissioners are still wary with one warning of “a day of reckoning” unless advertisers step up their game.

The FTC has issued a report on the subject following a lengthy investigation which kicked off with November 2007 ‘Town Hall’ event bringing together those in the industry.

The commission has now produced a revised set of principles for behavioural advertising. That’s where companies keep track of aspects of an internet user’s online activity so they can deliver targeted advertising; it doesn’t cover one-off ads such as those which come up on search engine results pages. The new principles are:

  • Sites must provide clear statements about tracking activity and give visitors the opportunity to opt out from having data collected.
  • Firms much only store tracking data as long as is genuinely necessary and must protect the data with security which is reasonable given how sensitive the information is.
  • Firms which change their privacy policies must get consumer permission before changing the way they store and use previously gathered data. This also applies in a takeover or merger involving firms with different polices.
  • Firms must only collect sensitive data after specifically getting permission.

There’s still some debate about what should be classified as ‘sensitive’ data. It will definitely include any information about children, plus addresses, social security numbers, financial data and health details. The FTC will work with the industry to define other details which could fall into this category such as people carrying out web searches which could indicate their sexual orientation.

Commissioner Jon Leibowitz warned that if firms did not follow these principles they could face tighter regulation or even legislation. He said, “Put simply, this could be the last clear chance to show that self-regulation can – and will – effectively protect consumers’ privacy in a dynamic online marketplace.”

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