• by Wendy Davis , Staff Writer @wendyndavis, January 13, 2009

Faced with calls for new privacy laws, the Interactive Advertising Bureau has joined forces with other marketing groups to persuade the government to maintain a laissez-faire stance towards behavioral targeting.

The American Association of Advertising Agencies, the Association of National Advertisers and the Direct Marketing Association have formed a coalition with the IAB to "to develop enhanced self-regulatory principles," the groups said today. The Better Business Bureau also will participate in the initiative.

Details are still lacking, but the implication is that the groups will promote a tougher regime than in the past. Previously, industry groups said that companies that engaged in "anonymous" cookie-based tracking -- that is, companies that tracked Web users across a limited number of sites, but didn't collect their names, emails, or phone numbers -- should only spell out their practices in a privacy policy and allow people to opt out.

The Federal Trade Commission issued proposed self-regulatory guidelines in December of 2007, which likewise called on companies to notify consumers about anonymous tracking and allow them to opt out. That document was met with a less-than-enthusiastic response by some industry groups, including the Newspaper Association of America, who said there was no reason for the FTC to get involved. The IAB issued a counter-proposal, which was meant to be more flexible than the FTC blueprint.

If IAB is now going to press for more stringent policies, that would mark a departure that's bound to spur internal controversy.

Meanwhile, there are real questions about whether any self-regulatory system can be enforced. Arguably, companies have an incentive to ignore voluntary guidelines because collecting as much data as possible could give them a business advantage.

While the new group is developing its principles, privacy advocates are continuing to press regulators for new laws. Among other points, the advocates argue that cookie-based tracking isn't as "anonymous" as people think. One fear is that information collected about users can give such detailed insight into them that it's possible that people will be identified regardless of Web companies' attempts to preserve users' anonymity. Though some industry representatives dismiss the prospect as far-fetched, it's happened in the past: In 2006, AOL released search data for 650,000 users. Thelma Arnold, previously "AOL User 4417749," was identified by The New York Times within days.