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US Internet advertisers agree on industry standards [2000] PLBIRp 41; (2000) 55 Privacy Laws and Business International Report 14

US Internet advertisers agree on industry standards

US INTERNET ADVERTISERS have adopted selfregulatory principles for online preference marketing and customer profiling. However, there is already some controversy about whether the principles will effectively protect privacy.

US network advertisers have taken customers' concerns over online privacy seriously by taking the initiative to draft a self-regulatory proposal. The principles, adopted by the Network Advertising Initiative (NAI), are supported by 90% of the network advertising industry, including DoubleClick and Engage Technologies. The NAI agreement is, however, voluntary and does not bind the whole industry.

The Federal Trade Commission (FTC) supports the privacy principles, but wants Congress to strengthen online privacy by enacting legislation to ensure that the 10% of network advertisers not covered by the NAI self-regulatory proposal will, in effect, need to be compliant.

FOUR MAIN PRINCIPLES

The NAI principles address the question of notice, consumer choice, access and security. They are endorsed by the Federal Trade Commission, and are being put into effect in the NAI companies.

1. Notice

Consumers will receive notice of network advertisers' profiling activities. If personal data are collected, a robust notice will be displayed at the time of information collection. "Robust" is not defined in this context. Where clickstream data (not personally identifiable) is collected, a clear notice will be included in the sites' privacy policy.

2. Choice

Once informed about the collection practices of the network advertiser, consumers should have the opportunity to decide whether or not to participate in profiling ie. opt-out. Previously collected non-identifiable data (such as technical information) cannot be matched with personal data unless the consumer has opted in. Again, a robust notice is required for alerting the consumer.

3. Access

According to the principles, consumers will have reasonable access to personal data and other information that is associated with it. It is not defined what is meant by "reasonable access".

4. Security

Network advertisers will have to make reasonable efforts to protect personal data. They must work with independent third parties to ensure enforcement of the principles. Such a third party could be one of the seal programmes.

FTC WANTS TO SEE CONSUMERS EDUCATED

While praising the principles, the FTC has suggested that network advertisers should educate consumers about the benefits of data collection. FTC Commissioner Mozelle Thompson said: "This programme alone will not provide all that consumers need and want in this area. Members of the profiling industry need to do more than derive selfbenefit from gathering information from consumers. They must incorporate their self-regulatory programme into a plan to demonstrate how consumers will benefit from information gathering and profiling. This undertaking is important for both consumers and the industry."

RESPONSE FROM EPIC AND JUNKBUSTERS

A report by EPIC (The Electronic Privacy Information Center) and Junkbusters, released in July shortly after the publication of the principles, criticises the principles for not providing adequate privacy protection. They claim that the principles were drafted without any significant input from consumer and privacy groups. They criticize the fact that the companies are allowed to link online profiling data with non-identifiable data on the basis of a robust notice.

The NAI principles are available at http://www.ftc.gov/opa/2000/07/ onlineprofiling.htm. The EPIC report can be found at http://www.epic.org/privacy/ internet/NAI_analysis.html.