[author: Rohit Dave, Law Clerk]
The Better Business Bureau (“BBB”) and the Direct Marketing Association (“DMA”) are in charge of enforcing the ad industry’s Self Regulatory Principles for Online Behavioral Advertising (“OBA Principles”), which regulate the online behavioral advertising activities of both advertisers and publishers (that is, web sites on which behaviorally-targeted ads are displayed or from which user data is collected and used to target ads elsewhere). Among other things, the OBA Principles provide consumers transparency about the collection and use of their Internet usage data for behavioral advertising purposes. Specifically, the “Transparency Principle” requires links to informational disclosures on both: (i) online behaviorally-targeted advertisements themselves, and (ii) webpages that display behaviorally-targeted ads or that collect data for use by non-affiliated third parties for behavioral advertising purposes. The “Consumer Control Principle” requires that consumers be given a means to opt-out of behavioral advertising.
Through its “Online Interest-Based Advertising Accountability Program”, the BBB recently enforced the OBA Principles in a series of actions—some with implications for publishers and some with implications for advertisers.
Last month, the BBB admonished publishers to heed these self-regulatory requirements when it issued its first Compliance Warning. The BBB encouraged the use of the DAA endorsed AdChoices Icon on any page from which a website operator allows a third party to collect user data for behavioral advertising or transfers such data to a third party for such purposes. This policy gives consumers “just-in-time” notice and enables them to decide whether to participate in behavioral advertising.
Recent inquiries by the BBB into the behavioral advertising activities of BMW of North America, LLC and Scottrade, Inc. illustrate the requirements of the OBA Principles on Web site publishers. In these inquiries, the BBB found that both companies had failed to provide enhanced notice and opt-out links on webpages where they allowed third-party data collection for behavioral advertising purposes. Both companies quickly achieved compliance in response.
The BBB warned that publishers that do not comply with the first party transparency requirements for third party data collection, but are otherwise in compliance with the OBA Principles, will face enforcement action by the BBB beginning on January 1, 2014.
The Transparency Principle requires third parties (e.g., advertisers and ad service providers) that engage in behavioral advertising on non-affiliated websites to provide enhanced notice to web users about behavioral advertising through a similar hyperlinked disclosure preferably containing the AdChoices Icon in or near the behaviorally-targeted advertisement itself. The disclosure should contain information about the types of data collected for behavioral advertising purposes, the use of such data, and (under the Consumer Control Principle) the choices available to users with respect to behavioral advertising. This requirement is designed to notify consumers that the ad they are viewing is based on interests inferred from a previous website visit.
Recently, the BBB found three companies in violation of the OBA Principles and on November 20th released decisions resolving their inquiries into the violations. The BBB visited a company website, and when it left the company site to browse other websites, found ads from the original company on the non-affiliated sites. However, the ads did not include enhanced notice, which, the BBB said, was in violation of the third party transparency requirements of the OBA Principles. According to the BBB, the party responsible for this omission was 3Q Digital, an ad agency. The agency used the self-service features of a demand side platform to serve targeted ads. The BBB found that when 3Q Digital used the self-service platform it stepped “into the shoes of companies explicitly covered by the OBA Principles” and assumed the compliance responsibilities of covered companies.
In response, 3Q Digital’s client included the AdChoices Icon in all its interest-based ads. 3Q Digital, in turn, took similar steps with all its other online campaigns.
The BBB’s recent enforcement activities emphasize the need for companies (whether they advertise online, display third party ads on their online properties, or simply contribute user data for use by others for behavioral advertising) to be vigilant of the specific requirements of the OBA Principles that are applicable to them based on how they participate in behavioral advertising. One motivation for the existence of the OBA Principles is to show regulators that legislation in this area is not necessary. To ward off legislation and avoid enforcement action by the BBB and the DMA, all parties involved should be mindful of the OBA Principles, and make them a part of their compliance programs.