Some Web Firms Say They Track Behavior Without Explicit Consent
Several Internet and broadband companies have acknowledged using targeted-advertising technology without explicitly informing customers, according to letters released yesterday by the House Energy and Commerce Committee.
Context & Ripple Effects
The committee letters give concrete company disclosures to a debate that had already moved from a 2006 call for an FTC probe into online profiling to 2007 pressure for FTC rules on user tracking. A March 2008 examination of the techniques used to follow users online had made the mechanics of behavioral advertising more visible.
The significance is not merely that targeting occurs, but that Internet and broadband companies have placed customer notice and consent at the center of congressional scrutiny.
First-order effects
- Internet and broadband companies that acknowledged the practice face immediate scrutiny from the House Energy and Commerce Committee over how they disclose behavioral-advertising tracking to customers.
- Customers’ browsing behavior becomes an explicit governance issue for the companies operating targeted-advertising programs, rather than only a technical input to ad delivery.
Second-order effects
- The disclosures strengthen the factual basis for advocates’ earlier push for FTC action, increasing pressure on regulators to distinguish notice-based tracking from tracking conducted without explicit consent.
- Companies offering targeted advertising have an incentive to make disclosure and permission flows more legible, because weak notice becomes a congressional and reputational liability.
Third-order effects
- If congressional scrutiny translates into enforceable expectations, behavioral advertising will be shaped as much by consent architecture as by the ability to collect and analyze user behavior.
- The episode points toward data monetization becoming a policy question about user control and disclosure, not solely an advertising-market practice.
The trend: Behavioral advertising is moving from an opaque tracking practice toward a consent-and-disclosure issue for regulators and network operators.