The Online Interest-Based Advertising Accountability Program (Accountability Program), which enforces the advertising industry’s self-regulatory system administered by the Council of Better Business Bureaus, has published the resolution of two formal inquiries into the privacy practices of The Hollywood Reporter (Hollywood) and Varick Media Management (Varick). According to the Accountability Program, both Hollywood and Varick violated the Digital Advertising Alliance’s (DAA) Self-Regulatory Principles (Principles) by failing to provide consumers with sufficient notice and choice relating to the collection of data for targeted advertising and the serving of interest-based ads (IBA) on their websites.
These enforcement actions reveal the following takeaways for companies, including advertisers and publishers, engaged in interest-based advertising.
Both First Parties and Third Parties Share Responsibility to Consumers
The Hollywood case involved a website publisher, Hollywood, and a company, Gravity, that displayed interest-based ads on Hollywood’s website allegedly failing to provide “enhanced notice” of the interest-based ads as required by the Principles. The Accountability Program took the position that even though Gravity was responsible for serving the interest-based ads, Hollywood shared responsibility and accountability for the failure to provide “enhanced notice.”
Broken or Missing Links Do Not Constitute “Enhanced Notice”
Varick encountered a different problem. Unlike Hollywood, Varick, both a website operator and an ad network, included an advertising option icon (AdChoices Icon) on each of its interest-based ads to alert consumers the ads were based on their prior browsing. However, Varick’s AdChoices Icons did not link to a short explanation of interest-based ads and an opt-out as required by the Principles. Further, Varick’s website did not include language adhering to the Principles or an opt-out from Varick’s collection practices.
Native Advertising Also Requires Notice and Choice
The Varick case is also unique in that it involved a company engaging in native advertising. Because native advertising is based on a consumer’s interests, the Accountability Program takes the position that companies engaged in native advertising must provide “enhanced notice” and choice the same way they would with interest-based ads.
Comply with Self-Regulation, and Carefully Craft Notices
The latest enforcement actions are yet another example of the Accountability Program investigating consumer complaints and monitoring websites and applications for compliance. The Accountability Program takes the position that the Principles apply not only to DAA members but also to all companies engaged in conduct covered by the Principles. Further, most major participants in the online advertising ecosystem are members of trade associations that have adopted the Principles, and almost all ad agencies, ad servers, and ad exchanges require advertisers and publishers to comply. If you are the subject of an Accountability Program inquiry, respond quickly. The press release stresses that both Hollywood and Varick “swiftly” implemented the Accountability Program’s recommendations.
BakerHostetler’s Privacy and Data Protection and Advertising, Retailing, and e-Commerce practices regularly counsel clients on privacy and data protection issues regarding big data, including interest-based advertising. For more information on compliance with the Principles, please see our previous posts on Cross-Device Tracking and Mobile Guidance and contact the authors.