• by Wendy Davis , Staff Writer @wendyndavis, June 23, 2009

A recent talk by some Federal Trade Commission officials confirms that the agency is taking a hard look at online advertising practices.

Speaking at an American Bar Association conference, new consumer protection chief David Vladeck had harsh words for the behavioral targeting industry's current privacy practices. The "current approach is not working," he said, according to the law firm Arnold & Porter, which blogged about the speech.

Vladeck reportedly said many companies' current practice of notifying users about online ad targeting and allowing them to opt out is inadequate, largely because people don't understand the policies. He's not the first to make this observation. Advocates and policymakers have said for years that privacy policies are incomprehensible even to sophisticated users. A recent study by UC Berkeley School also shows that the policies are filled with enough loopholes as to be meaningless.

Meanwhile, consumer protection deputy Eileen Harrington, who also talked at the same event, reportedly called deep packet inspection the most dangerous form of data collection, according to a blog post by the law firm Perkins Coie.

Older behavioral targeting companies like Audience Science and AOL's Tacoda don't rely on deep packet inspection to track users. Instead, they have deals with publishers to place cookies on users' computers. But companies that want to power behavioral targeting for Internet service providers -- like the now-defunct NebuAd -- use deep packet inspection technology to do so.