Thursday July 27, 2000
U.S., Web Ad Firms Strike Privacy Deal
By Andy Sullivan

WASHINGTON (Reuters) - A group of Internet advertisers announced Thursday a new set of industry standards crafted with the federal government to give Web surfers a say in how their personal data is used by online marketing firms.

The deal also bars Internet firms from using visitors' medical or financial data, Social Security numbers and online sexual behavior to determine which advertisements to flash on their screens.

Network Advertising Initiative (NAI), which represents 90 percent of the online-advertising industry, billed the deal as a self-regulatory measure, but was careful to point out that it came after a year of negotiations with the Commerce Department and the Federal Trade Commission.

The FTC issued a report that praised the NAI deal but also called on Congress to pass a consumer-privacy law to cover firms the organization does not represent.

``Self-regulation is an important and powerful mechanism for protecting consumers, and the NAI principles present a solid self-regulatory scheme,'' the FTC said. ``Nonetheless, backstop legislation addressing online profiling is still required to fully ensure that consumers' privacy is protected online.''

The agency voted 4-1 to approve the report.

Interest in consumer privacy on the Internet is growing in Congress. Yesterday, Arizona Sen. John McCain (news - web sites), the powerful chairman of the Senate Commerce Committee, introduced a bill that contained many of the provisions in the agreement.

NAI members agreed to place prominent notices on Web sites that use a device called a ``cookie'' to track users' movements.

User permission would be required before a Web site could combine personal data such as name and zip code with tracking data gathered on previous visits.

In addition, users would be given the option of declining to share their personal data when visiting a Web site.

Privacy advocates said the agreement still made it difficult for Web surfers to opt out of a data-collection process they see as unnecessarily intrusive.

``The FTC is ratifying a very invasive business practice. They're giving the green light to a type of advertising that we think deserves a much closer view,'' said Marc Rotenberg, president of the Electronic Privacy Information Center.

Members of the Network Advertising Initiative include DoubleClick Inc. (NasdaqNM:DCLK - news); Engage Technologies Inc. (NasdaqNM:ENGA - news); MatchLogic; 24/7 Media Inc. (NasdaqNM:TFSM - news); AdForce; AdKnowledge; Avenue A Inc. (NasdaqNM:AVEA - news); Burst! Media; and L90 Inc. (NasdaqNM:LNTY - news).

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