This is the summary of an article by Kraig Koch. You can find the original behavioral targeting article here: Regulatory Efforts and Best Practices for the Online Behavioral Advertising Industry
Online behavioral advertising serves as a main component for online marketing, gaining widespread popularity but at the same time, getting lots of critcisms from privacy advocates. A Wall Street Journal report published in 2011 indicated that consumers were “Very alarmed” when they found out companies and advertisers were tracking their online behavior.
This article talks about online behavioral targeting technology, and the opinions of the people that are associated with it. The article also makes suggestions on how to advance self-regulation, which will help make government regulation a last resort.
Online Behavioral Advertising
There are two unique ways in which user behavior is tracked. The first way is called intrasite or first-party collection. This manner of behavior tracking involves a website which works outside the help of an ad network, most of the time using cookies to track user previous search patterns, and the user gets a unique ID stored in a database. Tailored ads are then sent to individual users.
Another way of collecting user data is third-party advertising, which includes an ad network that serves as the third party; the one responsible for collecting data which was tracked by the first party websites that belong to its ad network. A first-party website sells its collection of user data to an ad network, and an ad network can create a more comprehensive unique user profile, as it includes behavior of individual users across a number of websites belonging to its network. In contrast, first party collection only tracks the behavior of a unique user in one website.
Nevertheless, third-party advertising is subject to many consumer privacy complaints, as it is possible that these ad networks allow other parties to use their information without consent.
Legal Case Studies: Facebook Beacon
Facebook Beacon was launched during November 6, 2007, and just after about a month, it was shut down after several complains from Facebook users regarding its privacy standards and faulty participation requests. Facebook Beacon had 44 affiliate websites, and as a Facebook user, your activity in one of these websites will be published to your wall. The problem is that Beacon was an opt out platform, which automatically enrolled users whether they liked it in the first place or not. The vivid story goes that Sean Lane, a Facebook user, purchased a ring from www.overstock.com which he will give as a gift to his wife. But that was published on his Facebook wall, which her wife saw, spoiling the surprise.
Another problem with Facebook Beacon was that it displayed information about other people using products from affiliated websites to Facebook, even if these users were not members of the social networking site. December 5, 2007 was when Mark Zuckerberg made a public apology, stating that the program was a failure and their implementation was even worse. A settlement agreement was made during September of 2009 worth 9.5 million dollars, some of that went to establishing a nonprofit Privacy Foundation built for promoting online security, safety and privacy.
Government Regulation
A bill from U.S. Rep. Bobby L. Rush, called “The Best Practices Act of 2010,” looks into consumer privacy issues, and aims at balancing out industry incentives and privacy rights. Some of the key provisions in this legislation proposal include: making users choose how their personal information is disclosed, used and collected, requiring companies to disclose how they are collecting, merging, retaining peresonal information, and explaining the options that users can have with regards to these practices. Among others.
Microsoft, Intel and eBay has expressed support to the Best Practices Act. Although it did not come to vote during 2010, Rush reintroduced this in February 2011 and hopes to get more supporters.
The latest government initiative with regards to consumer privacy was formed on March 2011. The Obama administration desires to create a privacy bill of rights, which discourages all forms of intrusive data gathering. This is in contrast to other Administrations which didn’t want to be involved in Internet consumers concerns.
Industry Self-Regulation
The advertising industry, on the other hand, aims to avoid government regulations, by developing self-regulation systems. During July 2009, the Self Regulatory Principles for Online Behavioral Advertising was released. It consists of seven principles: The Education Principle, The Transparency Principle, The Consumer Control Principle, The Data Security Principle, The Material Changes Principle, The Sensitive Data Principle, and The Accountability Principle.