• by Wendy Davis  @wendyndavis, September 8, 2011

A coalition of advocacy groups in the U.S. and Europe are calling on government officials to reject the ad industry's self-regulatory privacy program.

"Consumers in both the US and EU are offered limited options, based on principles crafted by the digital marketing industry and 'enforced' by groups that do not represent consumers or governments and that are completely lacking in any independence from the industry they are intended to monitor," the groups say in a letter sent Thursday to Federal Trade Commission consumer protection head David Vladeck, European privacy official Jacob Kohnstamm and other regulators.

U.S. groups signing the letter include Consumers Union, the Electronic Privacy Information Center and the Center for Digital Democracy.

The self-regulatory program requires that ad companies engaged in behavioral targeting notify consumers about the technique via an icon and to allow them to opt out of receiving targeted ads. The rules allow ad companies to continue to collect information about users who opt out.

The Better Business Bureau's National Advertising Review Council is enforcing the program, created by the umbrella group Digital Advertising Alliance.

The privacy advocates argue that the icon program falls short because "industry research" shows that "very few users ever click on it, let alone decide to opt-out." The advocates also say the icon doesn't sufficiently inform people about the "wide range of data collection that they routinely face."

The privacy coalition, dubbed TransAtlantic Consumer Dialogue, is urging officials in the U.S. and EU to undertake a number of new steps, including enacting regulations to "address new threats to consumer privacy from the growth of real-time tracking and sales of information about individuals' online activities on ad exchanges and other similar platforms."

Stuart Ingis, counsel to the DAA, disputes the groups' criticisms. He says that the Better Business Bureau has "100% independence" from industry. "The Better Business Bureau has done effective self-regulation independent of the industry for years," Ingis says.