The National Advertising Review Council announced that it plans to begin formal enforcement of the ad industry’s Self-Regulatory Principles for Online Behavioral Advertising.

The announcement followed a staff advisory opinion letter from the Federal Trade Commission that the agency has no present intention to challenge the program under competition laws.

Under the Principles, companies that collect or use data for online behavioral advertising purposes are required to use the Advertising Option Icon in or around their ads, as well as provide notice to consumers about data collection and allow consumers to opt out of receiving targeted ads.

The Council of Better Business Bureaus said it plans to use a vendor to monitor companies it reasonably believes are engaged in online behavioral advertising and will make confidential inquiries into a company’s possible areas of noncompliance.

If the CBBB finds that a company is not in compliance, it will recommend steps to achieve compliance. Only if incidents of noncompliance go uncorrected will they be publicly reported and referred to the appropriate regulatory authorities. A company that fails to comply might also lose its membership in one of the trade organizations involved in the Digital Advertising Alliance, the group that released the Principles.

The FTC said that the enforcement program is unlikely to restrain trade in an unreasonable way and has the potential to benefit consumers by increasing transparency of, and consumer control over, certain aspects of online behavioral advertising.

“[T]he accountability program is intended to enhance consumers’ understanding and control of [online behavioral advertising],” and will impose “relatively minor burdens on companies participating in [online behavioral advertising],” the agency said.

To read the FTC’s opinion letter, click here.

Why it matters:  The FTC letter noted that the program “does not preclude adoption of, and poses little risk of ‘crowding out,’ other systems for protecting consumers” with respect to online behavioral advertising, such as browser-based “do not track” systems. However, perhaps in recognition of the several pieces of pending federal legislation addressing privacy concerns and the possibility of a mandated do not track mechanism, the letter cautions that “[s]hould it later appear, however, that collective adoption and enforcement of the principles operates as an impediment to adoption of complementary or superior consumer protection, we might then reconsider this opinion.”