Worried that lawmakers will beat them to the punch, a coalition of Internet and ad-trade groups is rolling out its own set of rules to police Web advertising and data collection.
The set of self-regulations to be announced today is designed to give consumers more information and control over how their Web-surfing habits are used to serve up ads.
Although the debate over online privacy has been building for years, and some individual companies and organizations have taken steps to address it, today’s move marks the first industry-wide effort.
The new standards affect a broad range of companies operating online, including publishers, Internet service providers, search engines, ad networks and ad servers. The trade groups backing the effort include the American Association of Advertising Agencies, the Association of National Advertisers, the Direct Marketing Association and the Interactive Advertising Bureau.
The self-policing comes as Congress prepares to draft even stricter laws to address online privacy concerns, such as an “opt-in” provision that would prevent companies from targeting consumers without their explicit permission.
The industry isn’t naive enough to think that this announcement removes the threat of legislation, but it is clearly hoping to mollify some critics and tone down any draft bills.
“We think self-regulation is the preferred area,” said Stu Ingis, a partner at Venable LLP, which advised the industry. “It can be flexible and can adapt, and you wind up getting much better accountability and enforcement.”
The big issue is “behavioral targeting” or the more friendly sounding “interest-based advertising.” Both refer to the practice of tracking consumers’ viewing habits across the Web in an effort to gauge their interests and target ads to them.
Although the online industry argues that users would rather be shown relevant ads, the practice has raised privacy concerns among consumer groups and some in Congress.
The new rules call for more disclosure — in the form of a disclaimer or an icon — that would alert consumers when their information is being collected through a Web site or ad.
There will also be a link to a Web site with a list of entities that are tracking people’s information. Consumers will have the option to specify which, if any, parties can collect their data.
As part of the initiative, the advertising industry will launch a large ad campaign online to educate consumers about privacy and the various initiatives. The rules also require online companies to notify consumers to changes in their data collection or privacy policies, gain consent before collecting sensitive information, such as medical information and Social Security numbers, and to secure and protect the information they collect.