IAB's Consumer Privacy Initiative Takes Effect

Palm Springs, CA– The Interactive Advertising Bureau will give members up to six months to comply with a code of conduct for behavioral targeted advertising. New members must comply within three months or else forfeit their membership.

The IAB board, which met Sunday, gave its final approval to the code of conduct after supporting the concept a year ago.

“All IAB members will have to abide by the code, so any site where a third party is collecting data or third party data is used to target advertising is covered. That means most IAB members will be covered,” said IAB General Counsel Mike Zaneis in an e-mail interview.

Under the code, third parties and service providers are asked to provide “clear, meaningful, and prominent notice” on their websites describing the data that’s collected for online behavioral advertising and explaining how it’s used.

Websites are also expected to provide an “easy-to-use mechanism for exercising choice” about having website behavior tracked. However, the code does not specify how that mechanism should work.

Under the IAB code, members are not permitted to use health and financial information to deliver behaviorally targeted advertising. Nor should members collect personal information, as defined in the Children’s Online Privacy Protection Act.

The IAB has designated the Council of Better Business Bureaus to monitor and enforce the code.

The IAB’s code is directed at “service providers” and “third parties” that collect information about a website visitor’s behavior. A service provider is defined as an entity that collects and uses data from URLs traversed by a Web browser across websites; it could include Internet access services, developers of toolbars, and Internet browsers.

When asked how the IAB defines a third party, IAB General Counsel Mike Zaneis wrote in an e-mail interview: “We largely follow the FTC regarding 1st party versus 3rd party. Consumers have greater concerns about 3rd party data usage, thus the focus on enhanced 3rd party notice and choice.”

The IAB’s move comes as the Federal Trade Commission considers ways to better protect consumers against businesses that collect and sell information to target ads based on a website visitor’s behaviors.