Category Archives: Regulation

The U.S. Federal Trade Commission has released a finalized report (PDF) on their self-regulatory principles of behavioral advertising. Behavioral advertising involves using information about consumers’ online activities in order to deliver tailored advertising. The guidelines, which were originally issued in December 2007, were revised based on 63 comments by approximately 87 stakeholders. The major change in the principles was to remove first party, “behavioral advertising by and at a single website”, and contextual advertising, “advertising based on a consumer’s current visit to a single web page or a single search query that involves no retention of data about the consumer’s online activities beyond that necessary for the immediate delivery of an ad or search result”, from the scope of the principles. The U.S. Federal Trade Commission has released a finalized version of their self-regulatory principles of behavioral advertising. Behavioral advertising involves using information about consumers’ online activities in order to deliver tailored advertising. The guidelines, which were originally issued in December 2007, were revised based on 63 comments by approximately 87 stakeholders. The major change in the final version was to remove first party, “behavioral advertising by and at a single website”, and contextual advertising, “advertising based on a consumer’s current visit to a single web page or a single search query that involves no retention of data about the consumer’s online activities beyond that necessary for the immediate delivery of an ad or search result”, from the scope of the principles. The FTC’s self-regulatory principles are group under four central tenets: Transparency and Consumer Control; Reasonable Security, and Limited Data Retention, for Consumer Data; Affirmative Express Consent for Material Changes to Existing Privacy
Promises; and Affirmative Express Consent to (or Prohibition Against) Using Sensitive
Data for Behavioral Advertising.

In an interview with the New York Times, the acting director of the FTC’s bureau of consumer protection Eileen Harrington called on Internet companies to better explain how they collect and use data. She said that it is commonplace for them to place that “information in the midst of lengthy and hard-to-understand privacy policies” and that “We know advertisers can get their messages across when they want to. They darn better want to get this message across: ‘This is what we are collecting and this is how we are using it.’”

In an interview with the New York Times Bits Blog, the director of the Federal Trade Commission’s bureau of consumer protection Lydia Parnes said that she support self regulation of online advertising. Parnes is concerned that any legislation would be based “taking a snapshot of the way the market works at a specific time,” and would be quickly outdated by pace of change in online advertising. She also questioned how much consumers understand the connection between tracking and relevant advertising, saying: “If you ask people whether they want to be trace when they are online they generally say they do not. But if you ask them whether they want a free Internet they say yes. And if you ask them if they want relevant advertising, they say yes.” She also said that she felt that the FTC could be very persuasive in getting companies to follow general principles that the FTC proposes without requiring legislation.