CookieLaw Blog August 31, 2012

Behavioural Advertising: The Offer You Cannot Refuse

Our blog post title today is taken from the title of a new research paper published in Harvard Law and Policy Review.  In it, the authors present detailed findings on the uses of tracking technologies by online advertising companies.

They examine the range of techniques widely available and their use by the Top 100 US websites (based on Quantcast ranking).  Their findings present a powerful argument against the objections of ‘paternalism’ (or what we would call the ‘nanny state’ in the UK) that the advertising industry itself makes in an attempt to avoid greater online privacy regulation.

Even if you don’t agree with their argument, the paper, which can be freely downloaded, provides a very good description of the use of tracking technologies for behavioural profiling.

What they demonstrate is that whilst advertising companies talk about consumer choice and promote their opt-out programmes, they are utilising technologies to deliberately circumvent actions by users to exercise such choice.

The paper also talks about common practices to buy and sell collected data in ways that allow businesses to enhance the information they hold about individuals – a practice I discussed by example in a previous post about the difficulties of consent requirements in the proposed new EU Regulation.

The authors draw interesting parallels with earlier debates and eventual legislation to protect consumers from invasive telephone marketing practices – which were highly profitable even when consumers found them objectionable.

Their conclusion is that consumer privacy protections via regulation and legislation are required simply to enable proper consumer choice in digital advertising.  They also state that the current uses of tracking technology demonstrate an attitude in the advertising industry, that they believe the benefits of online advertising (such as lots of free content and services), outweigh the rights of consumers to have preferences respected

The authors are based in the USA and are therefore primarily focussed on practices and legislation there.  However their recommendations are universal.

They are effectively making a case for strong Do Not Track laws that require sites to respect consumer preferences for not tracking and effectively prohibit attempts to circumvent those preferences.

However, they also go further to suggest that attempts to enhance data collection through buying and selling between third parties, should be subject to both prior or ‘just in time’ disclosure and consent.

The debate will no doubt rage on.

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