Site   Web

May 2, 2011

The FTC Begins Crackdown On Behavioral Ads – Is Your Site In The Cross Hairs?

bahavtarget

On March 14, 2011, the Federal Trade Commission (FTC) announced its first behavioral advertising settlement. If your website collects behavioral data or serves behavioral ads – either directly or indirectly through the use of behavioral ad vendors – you need to understand and comply with the FTC’s notice and choice principles, or suffer the consequences.

What Is Behavioral Advertising?

Behavioral ads are based on anonymous data collected on how a user’s computer browses the Internet, including websites visited, searches made, and content read. This data is used to create a behavioral profile that is linked to a specific demographic. The ads seen by the computer’s user are tailored to the user’s interests resulting in significantly increased relevancy and sales.

Contextual ads, in contrast to behavioral ads, are based solely on the content of the specific website page the user is viewing. Because contextual ads are generally not as relevant to the user’s interests as behavioral ads, contextual ads are less effective, and therefore less
profitable.

Although behavioral data is essentially anonymous when collected, the FTC and privacy advocates are concerned that the amount and depth of some data could lead to personal identification of users. In addition, even if users are not personally identified, the enhanced data about them could rise to the level of an invasion of privacy.

The Chitka Settlement

In 2009, the FTC issued a staff report on behavioral advertising that explained the FTC’s principles regarding behavioral data. The FTC believes that its deceptive and a violation of the FTC Act to fail to provide to consumers proper notice and opt-out choice regarding the collection of behavioral data. The FTC’s settlement with Chitka, Inc. is the first settlement based on these principles.

Chitka is an intermediary between advertisers and websites that serve ads for the advertisers. To collect behavioral data, Chitka passes a cookie on users’ computers and then uses the cookie to track the users’ online behavior.

The FTC alleged in its Complaint that for over two years Chitka advised consumers that if they wanted to opt out of behavioral tracking they could click on a button titled “opt out”. Clicking the button would generate a message that read “you are opted out”. The catch according to the FTC is that the opt out lasted only for ten days, and then new cookies would be passed to consumers’ computers
resulting in tracking of behavioral data for serving behavioral ads.

In its settlement with the FTC, Chitka agreed to:

* delete all identifiable user information collected for the ineffective opt out period,
* provide consumers with a new opt out mechanism that lasts for at least five years, and
* notify consumers whose opt out was ineffective to opt out again.

Chitka also agreed to a notice and opt out procedure that could be interpreted as a blue print for what the FTC believes is generally required for all sites that collect behavioral data. This procedure includes:

* A message on the home page that reads “we collect information about your activities on certain websites to send you targeted advertisements. To opt out of [our] targeted ads, click here.”

* The “here” link points to an opt out page where the user is notified that opt out means the information would not be used for behavioral ads, the status of the opt out (in or out), and that opt out is limited to a specific browser and should be repeated if another browser is used.

* A link on any behavioral ad that reads “Opt Out?”, and that provides text when the users’ cursor hovers over the ad that reads “Opt Out of Targeted Ads”. The Opt Out? link would point to the opt out page described above.

Conclusion

The Chitka settlement clearly establishes that the FTC believes it’s a deceptive practice under the FTC Act to fail to provide notice and opt out choice regarding behavioral ads.

What’s more important is that the notice and opt out procedure agreed to in the settlement may be a clear indication of the specific procedure that the FTC requires for compliance.


Leading Internet and software attorney Chip Cooper has automated the process of drafting Website Legal Forms with his Website Legal Forms Generator. Use his free online tool — Website Documents Determinator — to determine which legal documents your website really needs. Discover how quick, easy, and cost-effective it is to draft your website legal forms at http://digicontracts.com/ .

2 Responses to “The FTC Begins Crackdown On Behavioral Ads – Is Your Site In The Cross Hairs?

    avatar Zippy Cart says:

    People are still very protective of their personal information (as they should be), but as technology creeps further and further into our lives, it will become increasingly difficult to maintain complete control of one’s privacy. That doesn’t mean we should completely surrender to the organizations and websites who want our info, we just need to stop being so shocked when we find out we’re being tracked.

    avatar Floyd says:

    I consider myself to be a private person but as far as privacy goes online, there’s very little to be had. I think there is a direct correlation between privacy and security and one could argue semantics but I think for the most part, it is security of our information that we are after, in general.

    For the most part, I believe, inherent in the very nature of the internet is the relinquishing on one’s privacy. So in other words, if you are actively using the internet, you ain’t got no privacy.

    Now with that said, should we protect our valuable information (cc, id, addresses, birth dates, etc.)? You bet!

    So again, I think it is the security and protection we are after now because the privacy left the building some time ago!

Submit a Comment

Your email address will not be published. Required fields are marked *






You may use these HTML tags and attributes: <a href="" title="" rel=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>

Please leave these two fields as-is:

Protected by Invisible Defender. Showed 403 to 3,861,816 bad guys.

css.php