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FTC probes DoubleClick
February 16, 2000: 5:03 p.m. ET

Agency probes Internet advertising firm for Web user data collection practices
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NEW YORK (CNNfn) - The Federal Trade Commission is conducting an informal probe into whether DoubleClick Inc., an Internet advertising firm, engaged in unfair or deceptive practices in collecting and maintaining data on Internet users.
    The probe comes just as the regulatory agency begins a general survey of the privacy policies of online commercial sites that could result in congressional legislation.
    DoubleClick said it received a letter from the federal consumer watchdog agency on Feb. 8, and is cooperating with the inquiry, according to a filing with the Securities and Exchange Commission.
    An FTC spokesman declined comment on the probe into the New York-based firm, which places advertising banners on thousands of Web sites and keeps track of who views them.
    On Feb. 10, the Electronic Privacy Center, a non-profit advocacy group, filed a complaint with the FTC criticizing DoubleClick's data collection practices.
    On Monday, DoubleClick (DCLK: Research, Estimates), which has been hit with five lawsuits from consumer groups regarding its data collection practices, unveiled five new privacy initiatives, including a media campaign to educate consumers through ads and a Web site called
    Meanwhile, the FTC initiated a survey of the 100 busiest U.S. commercial Web sites to determine how much personal information they are collecting from consumers and the extent to which they tell customers they are collecting this information and make it readily available.
    The FTC will present the survey's results to Congress, said Claudia Bourne Farrell, an agency spokeswoman. This is the third such survey the FTC conducted. Previous polls revealed many Web sites target young children, asking them all sorts of personal questions such as their parents' salaries, favored brands and types of products they own, Farrell said. (AMZN: Research, Estimates), the biggest online retailer, did not take an official stand on the FTC survey Wednesday, but Spokesman Paul Capelli said Amazon has always advocated that customers carefully checking out a site before buying anything from it.
    "We are committed to protecting the privacy of our customers. What we say is that we're going to use that (the survey) to make the site better," Capelli said. "We think it's important for customers to be sure that they're dealing with sites that do have a policy."
    News of the survey prompted criticism from the National Retail Federation, which believes retailers have already taken measures to improve online privacy, such as encouraging companies to post privacy policies on their
    Web sites and allowing consumer to opt out of direct mailings.
    "The FTC seems to be focusing on the Web sites exclusively and forgetting that for most retailers, the Web site is just one way of reaching the customers," said Mallory Duncan, vice president and general counsel for the retail federation.
    Duncan said sweeping regulations requiring companies to reveal all information it has about a customer means having to pull that information from bricks-and-mortar stores in addition to the Web sites, a costly and tedious prospect, he said.
    But Jason Catlett, president of Junkbusters Corp., a privacy advocacy and consulting firm based in Green Brook, N.J., applauds the FTC's efforts, but warned that after the agency's previous two surveys, it recommended against federal privacy legislation. He hopes the same does not happen this time.
    "I guess it would be difficult, given the appalling state of Internet privacy, for the FTC to again recommend against federal privacy law," Catlett said.
    He rejected the retail federation's argument that any legislation would affect all retail activity, not just commercial Web sites.
    "That's like saying we can't have privacy laws for telephones to protect the privacy of telephone conversations because that might spill over into other areas," Catlett said. Back to top
--Compiled by staff and wire reports


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Federal Trade Commission

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