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Privacy Groups Target Online Advertising

A coalition of privacy groups Wednesday called for creation of a "Do Not Track List," that would prohibit advertisers from tracking online movements of consumers.

Similar to the popular Do Not Call telephone lists, the Internet proposal comes as online advertising revenues are growing rapidly, providing critical revenue to startups and Web giants such as Google Inc. and Yahoo Inc.

Online ad revenue is forecast to more than double to $44 billion in 2011 from $17 billion in 2006, according to eMarketer.com.

Computer users should be notified when their Web surfing is tracked by online advertisers and Web publishers, argue the Consumer Federation of America, the World Privacy Forum and the Center for Democracy and Technology, among other groups in a coalition promoting the idea.

Rather than burying privacy policies in fine print, companies should also disclose them more fully and provide easier ways to opt out, the groups said.

The organizations submitted the proposals to the Federal Trade Commission, ahead of the consumer watchdog agency's workshop on Nov. 1-2 to study the increasing use of tracking technology to target online ads.

The issue arose during recent congressional hearings on Google's $3.1 billion bid to buy DoubleClick Inc., which places and tracks online ads.

Industry representatives say targeting means users are more likely to see ads for products they are interested in, rather than random ads.

Consumer groups counter that companies such as DoubleClick collect vast amounts of data on Web users that amount to a potential privacy threat.

Pam Dixon, executive director of the San Diego-based World Privacy Forum, added that the practice could lead to price discrimination. For example, lower-income Web surfers might receive higher interest-rate mortgage or other loan offers than what higher-income consumers receive.

Other advocates warn that the collected data is vulnerable to hackers and other security breaches, not to mention possible government agency efforts to subpoena the information.

AOL, a unit of Time Warner Inc., said Wednesday it will begin a consumer-awareness campaign and provide customers more information about targeted advertising. The campaign, which includes millions of clickable banner ads on the practice and the opportunity for consumers to opt-out of Web tracking, AOL officials said.

AOL also said it will expand the use of extended opt-out technology, developed by Tacoda, an online ad company AOL bought earlier this year

Currently, if users choose to opt-out from online ad tracking, a cookie, or small piece of software, is placed on their browser reflecting that choice. But if users delete their cookies, then the opt-out is lost. AOL's technology would enable the opt-out cookie to reset after cookies are deleted.

The technology amounts to a "de facto do not track list," Jules Polonetsky, chief privacy officer at AOL said. "We want to make the opt-out process as simple and transparent as possible," he added.

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