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Behavioral Advertising is a generic phrase that is used generally to describe online advertising where the type of ad selected to be served is based on either websites visited, previous actions taken, or information about you.
Consumers have become more aware of privacy issues related to Internet surfing
Some people get nervous about being targeted with ads today because of a website they visited yesterday.
Whether practices in this industry violate Section 5 of the FTC Act, which prohibits unfair or deceptive practices
Issued a report describing its ongoing examination of online behavioral advertising and setting forth revisions to proposed principles to govern self-regulatory efforts in this area.
In November 2007, the FTC held a two-day Town Hall meeting to discuss online behavioral advertising in a public forum.
Following that event, the FTC released for public comment draft self-regulatory principles to address privacy concerns.
Over the next few months, the FTC received over 60 comments from the online advertising industry, academics and privacy advocates, among others.
On February 12, 2009, the FTC issued revised principles which it intends to serve as the framework for industry self-regulation going forward.
Principle #1: Transparency and Consumer Control
Principle #2: Reasonable Security, and Limited Data Retention, for Consumer Data
Principle #3: Affirmative Express Consent for Material Changes to Existing Privacy Promises
Principle #4: Sensitive Data
What’s the issue?
Are self-regulatory programs sufficient?
Whether state or federal legislators should step in to limit the amount of information that online advertisers such as Microsoft, Google and Yahoo can collect and use.
In 2008, the U.S. Congress held three hearings on behavioral advertising, primarily focusing on deep packet inspection and potential behavioral advertising by ISPs and third parties affiliated with ISPs.
Lillie Coney, associate director of the nonprofit Electronic Privacy Information Center (EPIC), applauded the action of Congress, saying that behavioral advertising services will become more transparent and better understood if there are laws regulating them.
New York Assemblyman Richard Brodsky said behavioral advertising snips away individual privacy rights and should be regulated. He has introduced a bill in New York that would, in effect, establish an Internet advertising bill of rights for consumers.
Rep. Cliff Stearns, R.-Fla., is one of the congressmen involved in drafting a general privacy bill, which will contain provisions to regulate behavioral advertising, his spokesman told SCMagazineUS.com.
" Consumers need to know what information is being collected, who is collecting the information, and what are they doing with the information ," Stearns told SCMagazineUS.com Monday in an email. " The more information that is available to consumers will empower them to make the best decisions when it comes to their own personal privacy."
Threats to consumer privacy abound, both online and offline, and behavioral advertising represents just one aspect of a multifaceted privacy conundrum surrounding data collection and use.
Mike Zaneis, vice president for public policy for the Interactive Advertising Bureau, an industry group that represents online advertisers like Google and Yahoo, along with a good number of online media companies, said any legislation would be harmful to both online companies and consumers.
Besides self-regulation, there should be a monitoring system that can provide corresponding evaluatation. FTC's principles are pertinent to this issue;however, the biggest problem is how to ensure the entire industry has complied with those principles. If there is no substantial data and evidence to show those principles have been rigorously carried out, self-regulation will become null and void.
Legislation can not be ruled out if self-regulation is then proved to be invalid.