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FTC On Behavioral Advertising

Here is a summary of the FTC's position on interactive or behavioral advertising;

"Behavioral advertising may provide a variety of benefits to consumers, including free content, personalization of ads, and a potential reduction in unwanted advertising.

Consumer research has shown that consumers value online ads that are more personalized.

These ads may facilitate shopping for specific products. Further, behavioral advertising may help subsidize and support a diverse range of free online content and services that might otherwise not be available or that consumers would have to pay for, for example, blogging, search engines, and instant access to news and other information.

On the other hand, consumers have expressed discomfort about the privacy implications of being tracked online, as well as the specific harms that could result.

In particular, "Without adequate safeguards in place, consumer tracking data may fall into the wrong hands or be used for unanticipated purposes,"

"These concerns are exacerbated when the tracking involves sensitive information about, for example, children, health, or a consumer's finances."

The FTC Staff recommends the following four policy considerations when regulating interactive advertising:

1. The first is transparency and consumer control: companies that collect information
for behavioral advertising should provide meaningful disclosures to consumers about the practices, as well as choice about whether their information is collected for this purpose. (Privacy)

2. The second principle is reasonable security: companies should provide reasonable security for behavioral data so that it does not fall into the wrong hands, and should retain data only as long as necessary to fulfill a legitimate business or law enforcement need. (Limited Duration)

3. The third principle governs material changes to privacy policies: before a company uses behavioral data in a manner that is materially different from promises made when the data was collected, it should obtain affirmative express consent from the consumer. This principle ensures that consumers can rely on promises made about how their information will be used, and can prevent contrary uses if they so choose. (Control)

4. The fourth principle states that companies should obtain affirmative express consent
before they use sensitive data - for example, data about children, health, or finances - for behavioral advertising. (Express Consent)

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Full post as published by Misleading Advertising Law on July 09, 2008 (boomark / email).