• by Wendy Davis , Staff Writer @wendyndavis, July 16, 2013

The Internet standards group World Wide Web Consortium has unequivocally rejected the ad industry's proposal that it should be able to continue using behavioral targeting techniques to serve ads to people with do-not-track turned on.

In a decision issued last night, the co-chairs made clear that the ad industry's proposal was inconsistent with the W3C's tracking protection group's mission, which is centered on coming up with a way to use a do-not-track header to block or allow ad targeting and data collection.

“After consideration, the chairs have determined that the group has rejected that change proposal, finding it at odds with our chartered aims and the weight of group consensus,” co-chairs Peter Swire and Matthias Schunter wrote last night.

They added: “Commenters have emphasized that there would be widespread confusion if consumers select a Do Not Track option, only to have targeting and collection continue unchanged,” co-chairs Peter Swire and Matthias Schunter wrote last night.

But the move also seems to leave W3C without any obvious way to come up with standards that the ad industry will accept.

The W3C has been working for two years to figure out how to interpret do-not-track signals that the major browser companies now offer. The signals are aimed at telling ad networks and publishers that consumers don't want to be tracked, but don't actually block tracking.

The ad industry proposal, fronted by the umbrella group Digital Advertising alliance, called for companies to respond to do-not-track signals by discarding the specific URLs that users visited. But the ad industry wanted to allow companies to continue to compile profiles and serve targeted ads to users with do-not-track turned on -- unless users took the additional step of opting out through a separate link at an industry-run page. Ad groups argued that it wasn't feasible to stop serving targeted ads to people with do-not-track activated, given that around 20% of users had either done so themselves, or at least one in five users had turned on do-not-track (or were using browsers where it was turned on automatically)

Now that the W3C has shot down the ad industry's approach, the group intends to build on an “editors'” proposal, which starts with the assumption that ad networks should stop serving targeted ads to people who turn on do-not-track.

Privacy advocates aren't thrilled with that draft, but say it's better than the industry's alternative. One objection is that the editors' draft would allow companies to continue to collect data from people who send a do-not-track signal. That draft is still a work-in-progress, and the specifics on data collection could still be refined.

But the initiative still has a big -- possibly insurmountable -- problem: Ad companies need not follow the W3C's recommendations. In fact, the ad associations indicated today that their members might not agree to any upcoming recommendations.

Rachel Thomas, vice president of governmental affairs at the Direct Marketing Association, tells MediaPost it's “unlikely” that the industry would accept W3C's standards. “It looks to me like the W3C has devolved into an academic exercise on this issue,” she added.

Stu Ingis, counsel to the Digital Advertising Alliance, says he is “not optimistic” that the group will follow the forthcoming standard, “given that Mozilla and others have hijacked the signal ... and will undercut the Internet service offerings and content that consumers expect.”

Ingis was referring to Mozilla's plan to block third-party cookies by default, except for cookies  set by ad networks that have agreed to follow the W3C standard.

Those sorts of comments spurred advocates like John Simpson, director of Consumer Watch's Privacy Project, to renew calls for legislation. He adds that the industry's rejected proposal -- to continue tracking people -- “really made a mockery of the whole concept of do-not-track.”

Justin Brookman at the Center for Democracy & Technology points out that a walk-out from W3C by the industry won't necessarily help online ad companies reach their intended audience. “Industry may just walk away, but that would only encourage browsers to take more aggressive steps,” he says in an email to MediaPost. “They may require third parties to acknowledge DNT headers; otherwise, they'll restrict their cookies, turn off their JavaScript, or worse.”