Led by the Center for Digital Democracy (CDD), a group of advocacy organizations asked the Federal Trade Commission to investigate companies that are merging online and offline data about Internet users in order to create very specific behavioral advertising. In addition to the CDD, the groups include the U.S. Public Interest Research Group and the World Privacy Forum.

The complaint asks the FTC to investigate Internet companies as well as companies that support the auctioning and data collection/targeting system, such as BlueKai and AppNexus. “Recent developments in online profiling and behavioral targeting – including the instantaneous sale and trading of individual users, which increasingly involve the compilation and use of greater amounts of personal data – have all contributed to what is now standard practice online. A vast ecosystem of online advertising and data auctions and exchanges, demand- and supply-side platforms, and the increasing use of third-party data providers that bring offline information to Internet profiling and targeting, operates without the awareness or consent of users,” the complaint says. With real-time bidding the fastest-growing segment of U.S. online advertising, the complaint says that consumers are facing “a veritable ‘Wild West’” of data collection. “FTC inaction has contributed to decisions by the data collection and targeting industry that it can expand the use of consumer information for profiled targeting,” the complaint alleges.

The complaint also argues that if data about them is used, consumers should see a financial benefit. “The availability of so-called free content is an insufficient return to a consumer for their loss of privacy, including their autonomy,” the complaint says.

The complaint seeks to have the FTC create an opt-in requirement so that consumers must consent before companies can engage in “real-time online tracking and auction bidding, including providing related data optimization.”

Why it matters: With privacy already a hot-button issue at the FTC, the complaint was timed just as the two new members – one with a background of working on consumer privacy issues – joined the Commission. The FTC has already responded, telling the organizations that it is “carefully reviewing” their complaint.