NARC To Start Enforcing Privacy Principles

The Better Business Bureau's National Advertising Review Council said today that it will start formally enforcing privacy principles for online behavioral targeting.

Those principles require ad networks and other companies engaged in behavioral targeting to notify consumers about data collection via an icon and allow them to opt out of receiving targeted ads. But the self-regulatory principles don't require companies to stop collecting data about users. Privacy advocates -- and government officials like the Federal Trade Commission's consumer protection chief David Vladeck -- have argued that Web companies should allow people to opt out of data collection.

To enforce the program, the NARC intends to reach out to companies that aren't in compliance and ask them to start following the principles. If they don't, the organization has said it will publicly name them. Self-regulatory groups can also suspend or expel member companies that don't comply.

NARC also says it might turn over names of companies that don't comply to the FTC -- though the FTC's options are limited, given that no law currently requires companies to notify users about online ad targeting or allow people to opt out. Instead, the FTC can only take action if companies are deceiving users or doing something unfair.

In other words, a company that has a privacy policy but doesn't follow it might well be engaging in a deceptive practice. But if a company doesn't have a privacy policy, or has one that doesn't offer many protections, the FTC might not be able to do very much.

NARC's announcement comes one day after the FTC said it doesn't intend to challenge the program under antitrust laws. "The antitrust laws do not prohibit professional or trade associations from adopting reasonable ethical codes to protect consumers," the FTC's Michael Bloom, assistant director for policy & coordination, said in an 8-page letter clearing the enforcement plan.

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