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Yahoo! and Google have teamed up again - this time to oppose a New York State bill that would regulate web-based targeted advertising.

As reported by The Wall Street Journal, the two online ad behemoths are part of an industry coalition that just fired a letter to Assemblyman Richard Brodsky, opposing a bill he recently introduced in the New York senate.

This "consumer bill of rights" seeks to give the world a better understanding of ad networks a la the Google-owned DoubleClick - and limit their powers. The bill dubs them "third-party advertising networks," since they post ads - and collect user data - on multiple independent sites across the web.

"The legislation would require web sites that use third-party advertising networks to post a notice that they're doing this and post a link the network's web site where consumers can learn about the network's data collection policies," Kent Sopris, the legislative director for Assemblyman Brodsky, told us. "And it would make sure consumers have a way to opt-out."

The bill would also control the data these networks collect - and how they use it. For instance, one clause says this: "Third party advertising networks shall not use information about sensitive medical or financial data, sexual behavior or sexual orientation for the purposes of online preference marketing without the affirmative consent of the consumer."

And another says this: "Third party advertising networks shall not merge non-personally identifiable information collected through third party ad delivery and reporting activities with personally identifiable information without the consumer's prior consent to such merger."

Brodsky's bill turned up in The New York Times last month, and now, some of the web's biggest names have joined forces to oppose it, including Comcast, eBay, Facebook, Google, and Yahoo!

"[The bill] is unnecessary, most likely unconstitutional, and would have profound implications for the future of Internet advertising and the availability of free content on the Internet," reads the coalition's letter to Brodsky. "[It] would subject advertising networks to an extremely detailed, unprecedented array of notice, consent, and access obligations relating to 'personally identifiable information' and 'non-personally identifiable information' that is used for 'online preference marketing.' Every website that an advertising network contracts with would be subject to detailed notice requirements."

Google et al argue that they can police themselves. "This bill is unnecessary because advertising networks have already agreed to self-regulation commitments relating to most of the components of this bill. If they fail to live up to these commitments, then the Federal Trade Commission and the New York Attorney General’s office would have enforcement authority."

But the Assemblyman has other thoughts. "The industry feels that self-regulation is working," Sopris said. "And we feel there's nothing wrong with codifying things."

The coalition's letter also points out that "It is simply not feasible to comply with Internet advertising regulations that vary from state-to-state." Which means that if the bill passes, networks would be forced to change their practices entirely. And the likes of Google and Yahoo! would rather not do that. Such moves might mean a serious drop in revenue.

Yes, if you're running a third-party ad network, it may be difficult to ensure that your practices are properly explained on all the web sites you contract with. But is that really too much to ask? ®

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