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FTC issues ad-tracking guidelines

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US consumer protection body the Federal Trade Commission has backed a tightening of rules on internet advertising and the use of personal information. It has proposed stronger industry regulation of the tracking of users' habits.

Online advertising is often based on information about a user's browsing habits, but the FTC said consumers are often unaware of this and are not given a chance to object. It has proposed a set of principles that it says should be adopted by industry.

"Behavioural advertising provides benefits to consumers in the form of free content and personalised advertising but.. this practice is largely invisible and unknown to consumers," said an FTC statement. "The purpose of this proposal is to encourage more meaningful and enforceable self-regulation to address the privacy concerns raised with respect to behavioral advertising."

The proposal document aims to make the advertising industry create more stringent self-regulation and inform consumers more fully that their online behaviour is being tracked.

It lays down a set of principles which it says should govern the industry. The first of those is transparency.

"Every website where data is collected for behavioral advertising should provide a clear, consumer-friendly, and prominent statement that data is being collected to provide ads targeted to the consumer and give consumers the ability to choose whether or not to have their information collected for such purpose," says the document.

The FTC expressed concern that data gathered under one privacy policy might be used differently if a company subsequently changes its policy. It said that firms should only change their processing of the information if they have the express permission of the consumer.

The proposals also mandate increased security for collected information. As the public becomes more sensitive about personal data loss by companies and the possibility of identity theft, the guidelines say companies should be more careful with information.

"Any company that collects or stores consumer data for behavioural advertising should provide reasonable security for that data and should retain data only as long as is necessary to fulfil a legitimate business or law enforcement need," said the FTC.

The guidelines urge caution when collecting anything that might be deemed sensitive data, such as medical details or information about children's online activities. They say that such information should only be used with specific consent. The FTC has also asked for comment on a consultation on what kinds of information should be deemed sensitive.

See: The proposed guidelines (7 page/63KB PDF)

Copyright © 2007, OUT-LAW.com

OUT-LAW.COM is part of international law firm Pinsent Masons.

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