The Federal Trade Commission (“FTC”) recently extended the comment period for its proposed online behavioral advertising principles (“principles”) until April 11, 2008. These principles are intended to address unique concerns regarding the tracking of a consumer’s activities online – including the searches the consumer has conducted, the web pages visited, and the content viewed – in order to deliver advertising targeted to the individual consumer’s interests.

The FTC expressed concern that, while behavioral advertising provides benefits to consumers in the form of free web content and personalized ads that many consumers value ( e.g., free access to newspapers and publications subsidized by online advertising), the practice itself is largely invisible and unknown to consumers. The principles are designed, according to the FTC, to encourage more meaningful self-regulation in addressing the privacy concerns raised with respect to behavioral advertising.

The FTC’s principles propose the following:

  • Every website where data is collected for behavioral advertising should provide a clear, concise, consumer-friendly, and prominent statement that
    1. data about consumers’ activities online is being collected at the site for use in providing advertising about products and services tailored to individual consumers’ interests, and
    2. consumers can choose whether or not to have their information collected for such purpose.
  • Any company that collects and/or stores consumer data for behavioral advertising should provide reasonable security for that data, based on the sensitivity of the data, the nature of a company’s business operations, the types of risks a company faces and the reasonable protections available.
  • Companies should retain data only as long as is necessary to fulfill a legitimate business or law enforcement need.
  • Companies should obtain affirmative express consent before using collected data in a manner materially different from the promises the company made when it collected the data.
  • Companies should only collect sensitive data ( e.g., information on health conditions, sexual orientation, children’s activities online, etc.) for behavioral advertising if they obtain affirmative express consent from the consumer to receive such advertising. The FTC seeks comment on what types of information should be considered “sensitive.”

The FTC also seeks comment on issues surrounding secondary uses for online behavioral advertising data, such as (i) whether any secondary uses raise concerns, (ii) whether companies are in fact using data for secondary purposes, (iii) whether the concerns about secondary uses are limited to the use of personally identifiable data or also extend to non-personally identifiable data and (iv) whether secondary uses merit some sort of higher protection.

Comments on the proposed principles can be sent to: Office of the Secretary, Federal Trade Commission, Room H-135 (Annex N), 600 Pennsylvania Avenue, N.W., Washington, DC 20580 or [email protected]. Please do not hesitate to contact us if you require assistance in preparing comments or developing internal self-regulation guidelines and policies.

  • Mike Tomkies