Website Operators Must Give Consumers Real-Time Notice When Third Parties Are Collecting Information for OBA or Face Enforcement on Jan.1st

Arlington, VA – Oct. 14, 2013 – The Online Interest-Based Advertising Accountability Program (Accountability Program) today released its first Compliance Warning. The Warning makes clear that the Self-Regulatory Principles for Online Behavioral Advertising (OBA Principles), which the Accountability Program enforces, require first parties such as website operators to provide consumers with notice when third parties are collecting data for OBA on their websites. The Accountability Program will begin enforcement of this requirement on January 1, 2014. Companies that are out of compliance with other requirements of the OBA Principles still face enforcement actions at any time.

The Compliance Warning is a new tool that the Accountability Program will use to alert the advertising industry about its obligations where the enforcement body determines that a significant minority of companies that are otherwise in full compliance are confused about one particular aspect of the OBA Principles. The Accountability Program may also issue guidance about the Multi-Site Data Principles or the Mobile Guidance, as warranted.

Today’s Compliance Warning addresses one of the most significant innovations of the OBA Principles—enhanced notice. Enhanced notice shines a light on the cross-site collection and use of data for OBA by providing consumers with a real-time signal such as the Digital Advertising Alliance’s (DAA) Advertising Option Icon (AdChoices Icon) or a phrase such as “AdChoices,” wherever and whenever such collection or use is occurring. This notice links to an easy-to-use mechanism by which consumers can control their participation in interest-based advertising.

Prior to this innovation, consumers had no direct information when data regarding their browsing activities was being collected by third parties or whether first parties were transferring such data to unrelated third parties for use in interest-based ads. Nor did consumers always know when an ad was tailored to their interests.

“The Transparency Principle’s enhanced notice requirement demystifies interest-based advertising for the consumer. The superiority of just-in-time notice and choice over other mechanisms is clear,” said Genie Barton, VP and Director of the Accountability Program. “Real-time knowledge dispels the so-called ‘creepy’ feeling that the consumer is silently being followed around the Internet. The easy-to-use choice mechanism gives consumers the option to receive random, rather than interest-based, ads on ad-supported websites. These innovations make information formerly buried in the privacy policy more easily accessible to the consumer.”

While trillions of AdChoices Icons are being served on interest-based ads, some companies struggled to understand that first parties and third parties share responsibility for providing enhanced notice of third-party data collection for OBA. When the third party does not provide this notice or make arrangements with the first party to do so, the first party must provide the enhanced notice link. This enhanced notice link must be distinct from the link to the website’s privacy policy and must link to the place on the first party’s website where it discusses the OBA practices occurring on its website and provides a link to a choice mechanism. First parties must also provide notice and choice if they sell or otherwise transfer data to unaffiliated third parties for the third parties’ use in OBA.

The Accountability Program today also released a document administratively closing seven formal inquires of first parties that failed to provide this enhanced notice but were otherwise fully compliant with all the OBA Principles. Such Administrative Closures may be used when: 1) a company has had longstanding compliance with all other requirements of the OBA Principles; 2) a requirement appears to have confused a significant number of companies; 3) there is no prior FTC guidance or established industry practice regarding a particular requirement; and 4) the company promptly began working with the Accountability Program to implement its recommendations and has achieved or will soon achieve full compliance.