{"id":4952,"date":"2017-06-18T15:59:45","date_gmt":"2017-06-18T15:59:45","guid":{"rendered":"https:\/\/www.ftcguardian.com\/articles\/?p=4952"},"modified":"2018-03-18T23:25:29","modified_gmt":"2018-03-18T23:25:29","slug":"the-ftc-begins-crackdown-on-behavioral-ads-is-your-site-in-the-cross-hairs","status":"publish","type":"post","link":"https:\/\/www.ftcguardian.com\/articles\/the-ftc-begins-crackdown-on-behavioral-ads-is-your-site-in-the-cross-hairs\/","title":{"rendered":"The FTC Begins Crackdown On Behavioral Ads – Is Your Site In The Cross Hairs?"},"content":{"rendered":"
\n
\n

The FTC Begins Crackdown\u00a0<\/strong>On Behavioral Ads –\u00a0<\/strong>Is Your Site In The Cross Hairs?<\/strong><\/h1>\n

By Chip Cooper, Esq.<\/p>\n

On March 14, 2011, the Federal Trade Commission (FTC) announced its first behavioral advertising settlement.\u00a0 If your website collects behavioral data or serves behavioral ads \u2013 either directly or indirectly through the use of behavioral ad vendors \u2013 you need to understand and comply with the FTC\u2019s notice and choice principles, or suffer the consequences.<\/p>\n

What Is Behavioral Advertising?<\/strong><\/p>\n

Behavioral ads are based on anonymous data collected on how a user\u2019s computer browses the Internet, including websites visited, searches made, and content read. This data is used to create a behavioral profile that is linked to a specific demographic. The ads seen by the computer\u2019s user are tailored to the user\u2019s interests resulting in significantly increased relevancy and sales.<\/p>\n

Contextual ads, in contrast to behavioral ads, are based solely on the content of the specific website page the user is viewing. Because contextual ads are generally not as relevant to the user\u2019s interests as behavioral ads, contextual ads are less effective, and therefore less profitable.<\/p>\n

\"\"<\/a><\/p>\n

Although behavioral data is essentially anonymous when collected, the FTC and privacy advocates are concerned that the amount and depth of some data could lead to personal identification of users. In addition, even if users are not personally identified, the enhanced data about them could rise to the level of an invasion of privacy.<\/p>\n

The Chitka Settlement<\/strong><\/p>\n

In 2009, the FTC issued a staff report on behavioral advertising that explained the FTC\u2019s principles regarding behavioral data.\u00a0 The FTC believes that its deceptive and a violation of the FTC Act to fail to provide to\u00a0 consumers proper notice and opt-out choice regarding the collection of behavioral data.\u00a0 The FTC\u2019s settlement with Chitka, Inc. is the first settlement based on these principles.<\/p>\n

Chitka is an intermediary between advertisers and websites that serve ads for the advertisers.\u00a0 To collect behavioral data, Chitka passes a cookie on users\u2019 computers and then uses the cookie to tracks the users\u2019 online behavior.<\/p>\n

The FTC alleged in its Complaint that for over two years Chitka advised consumers that if they wanted to opt out of behavioral tracking they could click on a button titled \u201copt out\u201d.\u00a0 Clicking the button would generate a message that\u00a0 read \u201cyou are opted out\u201d.\u00a0\u00a0 The catch according to the FTC is that the opt out lasted only for ten days, and then new cookies would be passed to consumers\u2019 computers resulting in tracking of behavioral data for serving behavioral ads.<\/p>\n

In its settlement with the FTC, Chitka agreed to:<\/p>\n