FTC regulation of behavioral advertising

The United States Federal Trade Commission (FTC) has been involved in oversight of the behavioral targeting techniques used by online advertisers since the mid-1990s.

During the period from the mid-1990s to the present, the FTC held a series of workshops, published a number of reports, and gave numerous recommendations regarding both industry self-regulation and Federal regulation of OBA.

[8] In July 2000, the FTC recommended for the first time that legislation should be passed to protect Internet user’s privacy vis-à-vis online profiling.

[10] Under the FTC’s 2000 proposal, all online advertising networks and consumer-oriented commercial websites that allowed the collection of information from or about consumers would be required to implement and comply with the FIPPs.

[13] Participants at the forum described how technological advances in online profiling (now called “behavioral” advertising, targeting, or marketing), had allowed the practice to become more widespread and efficient.

[15] The public meeting was prompted, in part, by the growth of behavioral advertising and the interest of large Internet companies in using such techniques to deliver narrowly targeted ads.

These developments included Google’s plans to acquire DoubleClick, AOL’s interest in Tacoda, and Microsoft and Yahoo’s continued expansion of their own behavioral advertising products.

In December 2007, the FTC promulgated a set of proposed “Principles” intended to provide a basis for the online advertising industry’s self-regulatory efforts to address privacy concerns.

Likewise, the harm-based model has been criticized for failing to recognize a wider range of privacy-related concerns, including reputational harm or the fear of being monitored”.

[29] At the same Senate hearing, the Barack Obama administration called for a new “Internet user’s bill of rights”, which would give the FTC authority to regulate online behavioral advertising.

[34] The bill tasks the FTC with developing rules specifically targeted at OBA, requiring companies to offer consumers “a robust, clear, and conspicuous” opt-out mechanism from the use of their personally identifiable information by third parties “for behavioral advertising or marketing”.

[36] The bill does not include the FTC’s proposed Do Not Track mechanism, which Senator McCain stated at the press conference, “didn't seem to fit in our ability to get a balance for consumer and industry support”.