Behavioral Advertising in the United States
Despite its seeming anonymity, Internet use can be traced by government authorities and private companies. Online advertising companies, search engines, and, in general, those engaged on Internet advertising collect Internet users’ searching data. This is called behavioral advertising. After you searched for classical music; did you received an e-mail offering the best classical music selection? Well, this is precisely what behavioral advertising does. It traces people’s Internet use so it can be utilized on advertising campaigns. Is behavioral advertising an invasion of privacy? No yet. The United States (U.S.) Congress is considering a bill that would regulate behavioral advertising. The U.S. Federal Trade Commission- FTC- already adopted some guidelines on this issue. Likewise, the New York legislature introduced a bill in 2008 that regulates this practice; this was the first U.S. state to adopt measures against this activity. This article offers general information on behavioral advertising in the United States.
U.S. Congressmen are drafting a bill that would regulate behavioral advertising. The bill requires companies to disclose users that their Internet activity is being tracked for behavioral advertising purposes. Congressmen involved in drafting this bill have stated that Internet users must know who is collecting their information, what information is being collected, and how that information is being used. These measures will empower Internet users with control over their privacy. Some of the Congressmen involved in this bill are Rep. Rick Boucher, D.-Va and Rep. Cliff Stearns, R.-Fla. Critics say this bill may prove ineffective because advertising campaigns using behavioral advertising may be launched from foreign countries so the strict U.S. rules are avoided. Online advertising companies oppose the bill claiming that it does not benefit consumers. Consumers’ opinions are divided.
The U.S. FTC has been involved in the behavioral advertising issue for long time. The FTC defines behavioral advertising as “the marketing technique [that] relies on sophisticated technology to analyze consumers’ online activities and provide advertising identified as relevant to their interests.” In 2007, the FTC proposed some principles regarding behavioral advertising. For instance, (1) websites collecting information for behavioral advertising purposes should provide a clear and conspicuous statement informing users that data is being collected for advertising, and these sites should provide consumers the ability to opt-in; (2) company’s websites collecting consumers’ data should provide reasonable security for that data and should only retain data as long as it is necessary to fulfill a legitimate business or law enforcement purpose; (3) companies collecting and using consumers’ data should obtain affirmative consent before using data for purposes other than the ones specified when collecting the data; (4) collecting sensitive consumer data may be prohibited rather than subject to consumers’ choice. Yet, the FTC invited public comments on what may constitute sensitive data. The FTC has issued a report on behavioral advertising. This report collects public comments on the subject and provides suggestions. See report at http://www.ftc.gov/opa/2009/02/behavad.shtmhttp://www.ftc.gov/opa/2009/02/behavad.shtm.
New York is the first state issuing a bill that regulates behavioral advertising within its state boundaries. The bill was called the Third Party Internet Advertising Consumers Bill of Rights Act of 2008. The bill establishes strict requirements for the use of behavioral advertising. For instance, no sensitive medical, financial data may be collected; data collected must be protected; online privacy guidelines must be imposed; special rules are set for third party companies collecting consumers’ data; consumers should be aware of the data collection, use, delivery, and reporting policies and practices of the company collecting data; and concrete rules on third parties use of merged data (data transferred). The bill authorizes civil actions against those companies that violate this law, with a maximum penalty of US$1,000 per violation or $3,000 when a company engages in a pattern of violations.
Behavioral advertising will become the most common topic for the years to come. Tracking Internet users’ activity is the goal of any company offering products or services. Yet, consumers are entitled to privacy and governments should step in and protect individual’s privacy. U.S. consumers have enough with turning the TV and enduring these innumerable “paid programs.” Should we endure innumerable spam after searching the Web? There must be a middle line and hopefully it will be reached.