• by Wendy Davis  @wendyndavis, October 10, 2023

For the second time in eight years, a watchdog has found online marketplace Etsy out of compliance with some requirements of the ad industry's self-regulatory privacy code, which aims to notify consumers about online ad tracking and allow them to opt out of receiving behaviorally-targeted ads.

Specifically, Etsy allegedly allowed outside companies to collect data from consumers for ad-targeting purposes but failed to provide “enhanced notice” regarding targeted ads -- meaning ads based on users' activity across different sites -- according to the BBB National Programs' Digital Advertising Accountability Program.

Providing enhanced notice requires website operators to offer a prominent link that takes visitors directly to an opt-out site.

While Etsy's website had a link labeled “Interest-based ads,” clicking it took people to a privacy policy, instead of taking them directly to an opt-out mechanism, according to the accountability program.

In 2015, the watchdog faulted Etsy over similar issues with the notices provided to consumers. At the time, the self-regulatory group said Etsy had remedied the matter.

The watchdog said Tuesday that it discovered the recent issues with Etsy's website as part of periodical monitoring of companies that were previously reviewed.

The accountability program also said Tuesday Etsy's mobile app -- which allowed third parties to collect users' unique identifiers for ad targeting -- failed to meet self-regulatory standards regarding enhanced notice.

The watchdog said the issues it discovered with both the mobile app and website have been fixed by Etsy.

BBB National Programs has enforced the Digital Advertising Alliance's self-regulatory privacy code for more than 10 years. That code pre-dates the current wave of state privacy statutes, including new laws and regulations requiring online companies to comply with opt-out requests sent through mechanisms like the “Global Privacy Control."

That tool, developed by privacy advocates, enables web users to reject online ad targeting on a universal basis, instead of opting out site-by-site.

Currently, states including California, Colorado, Connecticut and Montana have passed legislation or issued regulations requiring companies to honor universal opt-out requests.