Evan Schuman's StorefrontBacktalk

Recently, a consortium of marketing entities, including the American Association of Advertising Agencies, the Association of National Advertisers, the Direct Marketing Association, the Interactive Advertising Bureau and the Council of Better Business Bureaus released its “Self-Regulatory Principles for Online Behavioral Advertising.” These voluntary guidelines are intended to help businesses that collect personal information about consumers’ behavioral activities online avoid government regulation of their data collection practices. The principals are as basic as they are inadequate. They include:

• Transparency and control: Companies that collect information for behavioral advertising should provide meaningful disclosures to consumers about the practice and choice about whether to allow the practice. Of course, companies with “privacy policies” would argue that they already do this and that if you don’t like the policy, you can take your business elsewhere. In reality, most people have no idea what data is being collected.

• Reasonable security and limited data retention: Companies should provide reasonable data security measures so that behavioral data does not fall in the hands of unauthorized persons. The devil here is in the details. For example, data should be retained for the minimum amount of time as “necessary for business” or for law enforcement purposes. So the local grocery store will collect and store data about my purchases for as long as they feel they want to, or just in case the cops want it?

• Material changes to privacy policies: Before a company uses behavioral data in a manner that is materially different from promises made when the company collected the data, it should obtain affirmative express consent from the consumer. The problem here is that most online contracts provide that they can be changed by the Web site operator at any time, just by posting the new contract online. This is the antithesis of a contract, where both parties are bound. For example, I recently tried to listen to my XM radio online through the XM Web site. No dice. While I had been paying for the service, XM decided to “enhance” its service by charging more for online access. They changed the contract by simply posting it online. Needless to say I cancelled my service immediately.