Behavioral Advertising Comes Under Further Scrutiny - Technologist
Technologist - The FindLaw Legal Technology Blog

Behavioral Advertising Comes Under Further Scrutiny

FindLaw columnist Eric Sinrod writes regularly in this section on legal developments surrounding technology and the internet.

Internet users are subject to all sorts of online advertising. Often, that advertising appears directed to their specific interests and preferences. How does that happen? It occurs because of what has been referred to as behavioral or targeted advertising.

Based on information collected from Internet users relating to their prior browsing and purchasing habits, advertisers seek to customize the Internet experience so that users receive advertising content that reflects their own individual interests.  While this presents some advantages to Internet users, allowing them potentially to receive and view content that may be relevant to them while possibly avoiding irrelevant content, there are some perceived disadvantages.

Indeed, privacy concerns emerge relating to the tracking of browsing habits and personal information while categorizing people within particular behavioral boxes. Thus, not too surprisingly, last year the Federal Trade Commission proposed certain principles to "address the need for greater transparency and consumer control regarding privacy issues raised by behavioral advertising." In essence, the FTC recommended transparency, customer control, reasonable security and limited time periods for retention of data relating to customer data."

Now, behavioral advertising is becoming an issue of governmental concern across the pond in England. In fact, the Office of Fair Trading there is set to initiate an investigation into how the habits and personal information of Internet users are feeding into online advertising.

The investigation, which ultimately could lead to an industry code of conduct, reportedly was prompted to ascertain consumer harm that may be caused by potentially misleading advertising and pricing. The investigation by the Office of Fair Trading is referred to as the "Advertising and Pricing Market Study," and it will examine various areas of online pricing and advertising, including the use of personal information for online advertising. Interested parties may provide submissions by September 18.

As the use of browsing and personal information becomes more sophisticated in terms of behavioral advertising, we likely may hear more from government regulators not only here in the United States, but also abroad. Hopefully, a balance will be struck so that Internet users can obtain the content they truly want without having their privacy encroached unacceptably in the process.

 

Eric Sinrod is a partner in the San Francisco office of Duane Morris LLP (http://www.duanemorris.com) where he focuses on litigation matters of various types, including information technology and intellectual property disputes.  His Web site is http://www.sinrodlaw.com and he can be reached at ejsinrod@duanemorris.com.  To receive a weekly email link to Mr. Sinrod's columns, please send an email to him with Subscribe in the Subject line.

This column is prepared and published for informational purposes only and should not be construed as legal advice.  The views expressed in this column are those of the author and do not necessarily reflect the views of the author's law firm or its individual partners.