Internet ad giants rally around privacy

Major online advertising companies lined up Monday behind a new organization spawned from the recent back and forth between their industry and the U.S. Federal Trade Commission over how advertisers should behave when it comes to delicate privacy issues.

Fifteen of the top online and e-mail marketing companies, including mega-brands DoubleClick Inc. and 24/7 Media, formed the Responsible Electronic Communications Alliance (RECA).

A virtual organization with resources in Washington D.C., New York, and San Jose, Calif., RECA is out to “promote professional standards for online communication and marketing,” according to the participants. As a starting point, the alliance this fall will poll the FTC along with major ISPs and others to formalize a set of industry-best practices.

The practices that RECA is looking to turn into industry standards were first submitted to the FTC in July.

“We will also come up with enforcement mechanisms, so these will be standards with teeth,” said Chris Wolf, a Washington-based attorney who will serve as RECA president.

Online advertisers – loosely organized as the NAI (Network Advertising Initiative) – over the summer had pledged to get moving on this set of self-regulatory principles pitched to the FTC as an alternative to privacy legislation in this area.

But the FTC then put the online advertising community on notice that the agency still thinks legislation is necessary – even though about 90 per cent of the Internet advertising community got behind the self-regulation efforts.

“Legislative action is necessary to ensure the remaining 10 per cent will comply with the protections,” said FTC officials in a statement last July.

Nevertheless, online marketers at that point promised the FTC to put self-regulatory principles in place while Congress continues pondering the agency’s call for legislation. RECA is an attempt to deliver on that pledge.

Although not turning back from its quest for legislation, the FTC smiled on the self-regulatory promises RECA is looking to put in place.

“FTC certainly has indicated that industry self-regulation is the right way to go, and RECA is patterned after the proposed principles,” Wolf said.

Those principles include notice of practices before personally identifiable information is collected; choice for consumers on how and whether information is used; access that allows consumers to view data and gauge its accuracy; and a baseline security measure.

The FTC over the summer had flagged enforcement as a shortcoming in the proposed practices. The agency said there should be a “reliable mechanism to identify and impose sanctions” on those marketers who step out of bounds.

Wolf said RECA now has in mind a structure in which an auditing firm would routinely monitor RECA members for compliance.