TRUSTe - Make Privacy Your Choice

Capitol Hill Has Its Eye on Behavioral Targeting

By Candice Stewart

There is no doubt that behavioral targeting has become an attractive marketing avenue and continues its rapid growth. As companies continue to spread their data-gathering tentacles, the general public and government legislatures remain in the dark about data-collection processes and to what privacy rights individuals are entitled. It's no wonder that the elusive advertising practices have gained legislators' attention on the Hill.

Congress and presidential candidate John McCain both identify a greater need for law enforcement in today's digital space. In a statement on August 14, McCain says that he sees a place for a combination of industry self-regulation and law enforcement to protect consumer online privacy and security. Read McCain's online privacy position…

Likewise, the House Energy and Commerce Committee could push legislation in the next session that could reshape today's behavioral targeting landscape in a big way. The Online Privacy Bill could impose restrictions and stringent requirements on ad networks, ISPs, and search sites. Congress is now in the process of collecting information from companies regarding their tracking and targeting methods to help sculpt any legislation that may emerge. On August 1, the committee sent letters to 33 large Internet companies asking they submit an outline detailing their behavioral targeting practices.

While legislation lurks on the horizon, it is still unclear what types of behavioral targeting will fall under the bill and what kinds of requirements may be enforced. The bill may require companies who compile more comprehensive data profiles on their users provide higher levels of user choice than less comprehensive collection practices. For instance, an ISP who is collecting very granular customer data may be held to stricter requirements than a search engine collecting broadly aggregated data.

Many Web sites are taking a self-regulatory stance to try and stamp out potential legislation. TRUSTe sealholders AOL, Yahoo!, and Microsoft have all provided "opt-out" methods to users who no longer wish to be tracked or targeted. Much of industry feels that a combination of self-regulation, public education, and transparent disclosure will help build consumer confidence and prove much more effective means of regulating compared to the slow process of legal deliberation. However, some privacy advocates such as the Center for Democracy and Technology feel that self-regulation is not enough and supports the idea of a "Do Not Target" list echoing the telemarketing "Do Not Call" list.

Some members of industry embrace the notion of the bill, believing a consistent set of federal guidelines will help build consumer confidence around behavioral targeting and clearing industry of the 'wild west' notoriety it currently carries. While views within the behavioral advertising space vary, one thing is certain: the Hill has its watchful eye on this watchful industry. Consumers are not happy, and legislation is becoming more imminent. If industry hopes to keep cashing in on this advertising gem, the landscape must become more transparent and provide both education and proactive privacy options to consumers.