The Interactive Advertising Bureau Board of Directors recently voted unanimously to require all members to sign a new code of conduct that necessitates their compliance with the industry’s self-regulatory principles.
Current members will have up to six months to make the pledge; new members must become compliant within three months of joining the group.
In 2009 a number of industry groups released the Self-Regulatory Principles for Online Behavioral Advertising, which are “intended to provide IAB Members with a set of best practices and guidelines.”
The principles require third parties and service providers to provide clear, meaningful, and prominent notice that describes their online behavioral advertising data collection and use practices, including descriptions of the types of data they collect, the purposes for which it will be used, and whether it will be transferred to a nonaffiliate for behavioral advertising purposes. Members must also implement an easy-to-use opt-out mechanism and retain data only as long as necessary to fulfill a legitimate business need, or as required by law.
The principles also require members to post a clear and prominent notice of their cookie-based behavioral advertising at the publishers’ sites, within or around the targeted ads themselves, and again at the place on the page where the data is collected. In addition, companies must obtain consumers’ consent to track their data online, although consent can be demonstrated on an opt-out basis in the majority of situations.
“The IAB believes an industry as young, dynamic and vibrant as this one, an economic engine of the U.S., responsible for so much employment and innovation, needs to be responsible and that self-regulation is in the best interest of our members,” Mike Zaneis, Senior Vice President, Public Policy and General Counsel, said in a press release about the new code of conduct. “We are pleased that our members have embraced this groundbreaking commitment.”
Overview and enforcement of the principles will be led by the Council of Better Business Bureaus. Companies that fail to follow the code of conduct will face a minimum six-month suspension and could face an enforcement action by the Federal Trade Commission. Zaneis told MediaPost Publications that the FTC could open a case “if the companies state they are doing one thing, but are not living up to their statement.”
To read the IAB code of conduct, click here.
Why it matters: The pledge to follow the principles is a further attempt by the industry to stave off federal regulations and/or legislation. With two pieces of privacy legislation already introduced in this session of Congress – including the Do Not Track Me Online bill – and more on the way, industry groups are doing what they can to convince legislators that new laws or rules are unnecessary.