In response to growing concerns surrounding the consumer privacy threats posed by emerging online marketing tactics, several European Internet companies recently published a code of conduct to govern their actions. However, the Wall Street Journal has reported that the European Union's privacy advisory panel has rejected the notion that advertisers can police themselves, suggesting that the proposed model does not comply with EU online privacy law.
The crux of the controversy surrounds the idea of behavioral advertising. This practice relies on the tracking of a consumer's web surfing habits in order to tailor online advertisements to their interests. Although this strategy has been leveraged to the benefit of many digital marketers, some critics suggest the potential for abuse is too high and represents a fundamental invasion of privacy.
To address this ongoing debate, several international marketing groups faced the issues head-on and drafted self-policing compliance frameworks to mitigate consumer concerns. One such initiative was the Online Interest-Based Advertising Accountability Program developed by the American Association of Advertising Agencies.
"The Accountability Program is charged with providing objective, independent and vigorous oversight and enforcement of the [Regulatory Principles for Online Behavioral Advertising]," said project director Genie Barton. "Our goal is to promote compliance with the principles by all companies within the advertising ecosystem."
The program's latest review of six cases did yield encouraging results, with all parties working to bring their practices into compliance in a timely manner. In each circumstance, issues surrounding the clarity and efficacy of consumer opt-out policies were resolved and are expected to provide valuable insight to all firms operating in the industry.
But despite the promise displayed by the American initiative, European regulators remain less convinced of the merits of similar models proposed across the Atlantic.
BEUC – the European Consumers' Organization – broached the topic initially by declaring the self-regulatory Framework for Online Behavioural Advertising was weak and potentially harmful, according to Computerworld. The code – drawn up by the Interactive Advertising Bureau Europe and the European Advertising Standards Alliance – was perceived as an incomplete, "patchwork" solution that did not account for all scenarios posed by online behavioral advertising.
The EU's ruling suggests that panelists agreed with the allegation leveled against the framework, and asserted that several websites were guilty of providing false opt-out assurances.
"This wrong presumption can be damaging to users, but also to the industry if they believe that by applying the code they meet the requirements of [EU standards]," panelists explained, according to the Wall Street Journal.
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