Consumers to Control Industry's Cookie Appetite

The Digital Advertising Alliance (DAA) -- a coalition of media and marketing associations -- recently announced that it will implement a universally recognized icon that can be placed in the header of web browsers and that will permit consumers to control online behavioral advertising and "all other collection and use of web viewing data" pursuant to DAA principles (Browser Option). According to a White House press statement, companies that represent the delivery of nearly 90 percent of online behavioral advertisements, including Google, Yahoo!, Microsoft, and AOL, have agreed to comply when consumers choose to control data collection using the Browser Option. DAA expects that the Browser Option will be implemented within nine months. The White House stated that companies that commit to the Browser Option will be subject to FTC enforcement.

The DAA's announcement comes amid growing public awareness of online privacy issues, following revelations that Facebook, Google and other websites were collecting customer data in unexpected ways -- e.g., the disclosure that Facebook transmits identifying information to advertising and tracking companies, and Google's recently reported bypassing of the default privacy settings in the Safari browser in order to force the web browser into accepting tracking cookies. In December 2010, the US Commerce Department published a green paper calling for stronger privacy protections, because the "misalignment" between consumer privacy expectations and commercial data practices can "undermine consumer trust and inhibit the adoption of new services," as well as "create legal and practical uncertainty for companies." The Federal Trade Commission (FTC) also called for consumer privacy protections in a December 2010 report, which recommended a "Do Not Track" option as the most practical way of permitting consumers to control the collection and use of their data. On February 23, 2012 -- the day after DAA announced its Browser Option -- the White House released a "Consumer Privacy Bill of Rights" as part of the Administration's comprehensive framework for the protection of consumer data privacy.

While the White House and others have referred to the Browser Option as "Do-Not-Track" technology, critics of the option claim that it does not go far enough in protecting customers (see articles here and here). The DAA reportedly recently conceded that "'Do Not Track' is a misnomer" and is "not an accurate description of what's going on." The DAA stated that while the Browser Option will stop some data collection, it will not stop all data collection.

The Browser Option will be based on self-regulatory principles adopted by the DAA. The principles govern the collection and use of data for online behavioral advertising (OBA) and the collection and use of multi-site data for purposes other than OBA. DAA's principles for multi-site data "extend beyond collection of data for OBA purposes and apply to all data collected from a particular computer or device regarding Web viewing over time and across non-Affiliate Web sites." The principles also address consumer control over data. The DAA said that the Browser Option protections will be applied where "a consumer: (1) has been provided language that describes to consumers the effect of exercising such choice including that some data may still be collected and (2) has affirmatively chosen to exercise a uniform choice with the browser based tool." The standard will not apply "where (1) and (2) do not occur or where any entity or software or technology provider other than the user exercises such a choice."

The DAA's current description of the Browser Option does not address a number of issues (e.g., implementation plans and applicability to mobile devices). We will continue to monitor DAA's development and implementation of the Browser Option in future blog posts.

© Arnold & Porter Kaye Scholer LLP 2012 All Rights Reserved. This blog post is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.