• by Wendy Davis  @wendyndavis, January 6, 2005

California Rep. Mary Bono again introduced into Congress on Tuesday a bill that potentially hinders installing cookies on consumers' computers. The bill, H.R. 29--known as the "Spy Act"--requires that Web companies obtain consumers' consent before placing software on their computers. Last year, the same legislation passed in the House by a 399-1 vote, but was not voted on by the Senate.

The proposed law contains exceptions for cookies--but only if they "act like cookies are supposed to act," said a spokeswoman for Bono. Importantly, the exemption applies to cookies installed by an Internet service provider, "interactive computer service," or Web site, and only applies if the information collected isn't shared with anyone other than the provider, service, or site. (The exception also applies to programs that store user information that's required to access sites.)

Bono's spokeswoman said the cookie exemption is designed to apply to Web companies such as Amazon, which uses cookies to recognize consumers and make recommendations. But, she said, the exemption would not apply to a company that used cookies to track consumer behavior across more than one company's Web site. In other words, the proposed bill might make it harder for companies to create audience segments by tracking consumers as they move throughout the Web.

Last year, the proposal unnerved many in the ad industry. In fact, last year, Dynamic Logic CEO Nick Nyhan joined forces with behavioral targeting companies Revenue Science and Tacoda to develop industry-wide best practices standards, in anticipation of lobbying in Washington.

For now, Dave Morgan, CEO of behavioral targeting company Tacoda Systems, said he was taking a wait-and-see attitude toward the bill. "As far as Tacoda's concerned, we're going to watch it very carefully."

Omar Tawakol, senior vice president of marketing at rival behavioral targeting company Revenue Science, added that the proposed law potentially deals a blow to the entire analytics industry. He said that any lobbying efforts against the bill would probably be directed to the Senate.