Online Advertising Hearing Recap

NebuAd, which has reportedly worked with more than a dozen ISPs in the United States, collects information about users' Web surfing habits, then delivers targeted advertising based on those results. Privacy critics have protested the service, saying it uses common Internet attacks to collect data and may be illegal because it does not get affirmative consent from both the ISP subscribers and the Web sites they visit. But NebuAd, Robert Dykes, the company's chairman and CEO told the Senate Commerce Committee that the company does not collect personally identifiable information or keep the information it collects for an extended time. NebuAd only collects information to use to create profiles for a limited number of advertising categories, Dykes said. All other data collected is deleted, he said. In addition, users can easily opt out of NebuAd's data collection. At the same hearing, the Federal Trade Commission testified that the issues surrounding behavioral advertising are complex, "the business models are diverse and constantly evolving, and ... behavioral advertising may provide benefits to consumers even as it raises concerns about consumer privacy," said Lydia Parnes, Director of the FTC's Bureau of Consumer Protection. The Center for Democracy and Technology noted that consumers are increasingly concerned about the growing amount of personal data being collected by online advertising practices, but that they are ill-equipped to take steps to protect their privacy. CDT also said that the emerging advertising model partnering ISPs with ad networks brings new legal complexities and privacy risks to the e-commerce equation. CDT urged Congress to take a comprehensive look at online advertising practices and made several recommendations for designing policies and laws that insure consumer privacy and instill trust in the electronic marketplace.
(Link to sources below)