Trade Associations Bond on Industry Self-Regulation

With the threat of an online privacy bill looming, some of the nation’s largest media and marketing trade associations released self-regulatory principles on July 2 to protect consumer privacy in ad-supported interactive media.

With the threat of an online privacy bill looming, some of the nation’s largest media and marketing trade associations released self-regulatory principles on July 2 to protect consumer privacy in ad-supported interactive media.

The seven principles will require advertisers and Web sites to clearly inform consumers about data collection practices and enable them to exercise control over that information. The collaboration includes the American Association of Advertising Agencies, the Association of National Advertisers, the Direct Marketing Association and the Interactive Advertising Bureau.

The Council of Better Business Bureaus is also part of the effort and has agreed, along with the DMA, to implement accountability programs to promote widespread adoption of the principles.

This is a big deal: Taken collectively, the participating associations represent more than 5,000 U.S. companies, and the task force represents the first time all advertising and marketing industry associations have come together to develop self-regulatory principles.

And it should be a big deal, quite frankly. Concerns around government regulation on the use and collection of data on the Internet has been swelling in the industry over the past few years as the medium has become all-encompassing. What’s more, the House Communications Subcommittee Chairman Rick Boucher (D-Va.) is preparing an online privacy bill right now that may contain an “opt-in” provision that would prevent companies from targeting consumers without their explicit permission.

The seven principles
The self-regulatory program is expected to be implemented at the beginning of 2010. The process, however, started in January, when the task force announced it was working on developing these principles in direct response to calls by the Federal Trade Commission.
The principles are designed to address consumer concerns about the use of personal information and interest-based advertising, while preserving the robust advertising that supports free online content and the ability to deliver relevant advertising to consumers.
The seven principles include the following:

  • The Education Principle, which calls for organizations to educate individuals and businesses about online behavioral advertising. Along these lines, a major campaign — expected to exceed 500 million online advertising impressions — will be launched over the next 18 months to educate consumers about online behavioral advertising, the benefits of these practices and the means to exercise choice.
  • The Transparency Principle, which calls for clearer and easily accessible disclosures to consumers about data collection and use practices associated with online behavioral advertising.
  • The Consumer Control Principle, which requires Internet access service providers and providers of desktop applications software such as Web browser toolbars to obtain the consent of users before engaging in online behavioral advertising, and take steps to de-identify the data used for such purposes.
  • The Data Security Principle, which calls for organizations to provide reasonable security for, and limited retention of, data collected and used for online behavioral advertising purposes.
  • The Material Changes Principle, which calls on organizations to obtain consent for any material change to their online behavioral advertising data collection and use policies and practices to data collected prior to such change.
  • The Sensitive Data Principle, which recognizes that data collected from children and used for online behavioral advertising merits heightened protection, and requires parental consent for behavioral advertising to consumers known to be less than 13 on child-directed Web sites. This principle also provides heightened protections to certain health and financial data when attributable to a specific individual.
  • The Accountability Principle, which calls for the development of programs to further advance these principles, including programs to monitor and report instances of uncorrected noncompliance with these principles to appropriate government agencies.

Sounds like a plan to me. What do you think? Do you think this initiative will stave off government regulation for good, or should these trade groups be doing more? Leave a comment here, and let us know how you feel.