With more and more people using the Internet these days, online advertising and tracking have also become widespread. However, the matter of privacy is also a major concern, and this has spurred the litigation of such activities, both in the US and other countries. In turn, this has also brought about a great impact on the insurance industry. This is the summary of a behavioral targeting article by Laurie Kamaiko, Mark Schreiber, and Dominique Shelton. Here’s the link to the original article: Online Behavioral Advertising/Tracking Litigation: A Rising Risk Facing Insurers and Insured.
A Booming Industry
Seeing the potential of advertising through the Internet, many companies have resorted to online tracking, or the following of consumers’ activities online. As they learn more about the needs and preferences of their consumers, they are able to “target” their ads toward the people who are most likely to purchase their products or services.
Consequently, companies are willing to pay a lot of money for consumer information, and this has resulted to online advertising becoming a billion-dollar industry. Inevitably, this has caught the attention of many legislators as well. At present, actions have been filed against various companies, particularly those in the telecommunications, electronics, and software industries, as it is through their products that tracking and advertising can be done.
Regulation and Legislation
In the US, legislation concerning online advertising and tracking has been developed, expanded, and enforced in recent times. These include the Children’s Online Privacy Protection Act (COPPA), the Electronic Communications Privacy Act (ECPA) and the “Do Not Track” proposal.
Notably, the Federal Trade Commission (FTC) proposed that the COPPA include “online behavioral advertising” information in its definition of children’s “personal information.” Another proposal that has been proposed by the FTC, and has reportedly been supported by the Obama administration, is “Do Not Track,” which seeks to stop targeted advertising without the consent of the consumer. Meanwhile, the ECPA, which includes the Federal Wiretap Act and Stored Communications Act, is currently being used by plaintiffs in their arguments about consumer privacy.
Aside from the US, governments in other countries, particularly Canada and some European nations, have also taken steps toward dealing with online tracking and advertising. In May 2011, the European Union required companies to obtain “explicit consent” from consumers before conducting tracking activities. Meanwhile, Canada also issued similar regulations through its Office of the Privacy Commission or OPC.
Effect on the Insurance Industry
With an increasing number of consumers filing privacy complaints, and legislators bent on regulating online activities, one industry is being affected greatly: insurance. On the one hand, they are the insurers of companies that conduct online tracking; in addition, they perform tracking activities on their clients as well. Thus, they have to be very cautious in their activities and handle claims with care. More importantly, they must be aware of the legislation and regulation of online ads and tracks; otherwise, their enterprises would be very much at risk.