As I recently reported, in an effort to give greater assistance to companies that engage in online behavioral advertising (“OBA”), many trade groups in the industry were working on creating a set of standards to help companies understand how to provide clear notice, and how to allow consumers a choice about whether their information is used for OBA purposes. Those industry self-regulatory principles have now been released, and provide different levels of notice and choice requirements depending on whether a company
- allows data to be collected on its website for OBA purposes,
- allows ads to be served based on information collected for OBA purposes,
- collects data for behavioral advertising purposes on one site, and passes it to another (unaffiliated) website in order to serve targeted ads, or
- is engaging in OBA and acting as a “Service Provider” (namely if it is a provider of Internet access, toolbars, browsers, or provides other desktop application or software).
Unlike companies in the first three groups, Service Providers are held to a higher standard, and must get consumers consent before they can engage in behavioral advertising. Service Providers also must have a notice – linked from their web sites – that describes their OBA activities, including information about how a consumer can opt out of having his or her information used for OBA purposes, as well as the types of data collected, the use of such data, and whether data is transferred to any third parties for OBA purposes.
Under the industry self-regulatory principles, different “accountability programs” will be developed, through which additional direction about how to provide notice and choice will presumably be given. Those programs are intended to go into effect in the beginning of next year.
These materials have been prepared by Winston & Strawn for informational purposes only. These materials do not constitute legal advice and cannot be relied upon by any taxpayer for the purpose of avoiding penalties imposed under the Internal Revenue Code.