Ad Industry Groups Announce Principles for Online Collection of Consumer Data

This posting was written by William Zale, Editor of CCH Advertising Law Guide and Do's and Don'ts in Advertising.

A group of the nation's largest media and marketing trade associations today released self-regulatory principles to protect consumer privacy in ad-supported interactive media.

The seven principles are designed to require advertisers and websites to clearly inform consumers about data collection practices and enable them to exercise control over that information.

This unprecedented collaboration represents the entire marketing-media industry and includes the American Association of Advertising Agencies (4A’s), the Association of National Advertisers (ANA), the Direct Marketing Association (DMA), the Interactive Advertising Bureau (IAB), and the Council of Better Business Bureaus (CBBB).

The CBBB, a leading organization dedicated to advancing marketplace trust, has agreed, along with the DMA, to implement accountability programs to promote widespread adoption of the seven principles.

FTC Commissioner’s Comments

“Consumers deserve transparency regarding the collection and use of their data for behavioral advertising purposes,” said FTC Commissioner Pamela Jones Harbour. “I am gratified that a group of influential associations—representing a significant component of the Internet community—has responded to so many of the privacy concerns raised by my colleagues and myself. These associations have invested substantial efforts to actually deliver a draft set of privacy principles, which have the potential to dramatically advance the cause of consumer privacy.”

The Commissioner commended the organizations for taking the important first step. “I am hopeful that successful implementation will follow,” Harbour said. “In the meantime, I encourage the entire privacy community to continue a dialogue that places the interests of consumers first.”

Seven Principles

The principles are designed to address consumer concerns about the use of personal information and interest-based advertising while preserving the innovative and robust advertising that supports the vast array of free online content and the ability to deliver relevant advertising to consumers. This self-regulatory program consists of the following seven principles.

• The Education Principle calls for organizations to participate in efforts to educate individuals and businesses about online behavioral advertising. To this end, the digital media industry intends, in a major campaign that is expected to exceed 500 million online advertising impressions, to educate consumers about online behavioral advertising, the benefits of these practices and the means to exercise choice, over the next 18 months.

• The Transparency Principle calls for clearer and easily accessible disclosures to consumers about data collection and use practices associated with online behavioral advertising. It will result in new, enhanced notice on the page where data is collected through links embedded in or around advertisements, or on the web page itself.

• The Consumer Control Principle provides consumers with an expanded ability to choose whether data is collected and used for online behavioral advertising purposes. This choice will be available through a link from the notice provided on the web page where data is collected. The Consumer Control Principle requires “service providers,” a term that includes Internet access service providers and providers of desktop applications software such as web browser “tool bars” to obtain the consent of users before engaging in online behavioral advertising, and take steps to de-identify the data used for such purposes.

• The Data Security Principle calls for organizations to provide reasonable security for, and limited retention of data, collected and used for online behavioral advertising purposes.

• The Material Changes Principle calls on organizations to obtain consent for any material change to their online behavioral advertising data collection and use policies and practices to data collected prior to such change.

• The Sensitive Data Principle recognizes that data collected from children and used for online behavioral advertising merits heightened protection, and requires parental consent for behavioral advertising to consumers known to be under 13 on child-directed websites. This principle also provides heightened protections to certain health and financial data when attributable to a specific individual.

• The Accountability Principle calls for development of programs to further advance these principles, including programs to monitor and report instances of uncorrected non-compliance with these principles to appropriate government agencies. The CBBB and DMA have been asked and have agreed to work cooperatively to establish accountability mechanisms under the principles.

The complete document appears here at the CBBB website.

Further details will be reported in CCH Advertising Law Guide, Do’s and Don’ts in Advertising, and CCH Privacy Law in Marketing.