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Congress Examines Online Advertising, Opt-In Models

Wed, 07/09/2008 - 8:22am
Rhonda Wickham

A Senate committee is holding hearings today with executives from the likes of Microsoft, Google and Facebook to discuss online privacy. A spotlight is expected to be set on companies that track user behavior to serve up advertising. The results of the hearings could have significant implications for wireless operators and the mobile advertising community.

According to a report in USA Today, a lesser known company – NebuAd – is also due to testify. The Silicon Valley-based NebuAd has raised the hackles of privacy advocates with its service. It works with Internet service providers to track the online behavior of their customers and then serve up targeted banner ads based on that behavior.

In the online world, this sort of service is provided when users download adware to their computers. The software programs can then track where a user goes on the Internet and use that mined information to deliver customized online advertising.

Early on, privacy advocates protested when these companies hid their software programs by bundling them with free screensavers and online games. In the case of NebuAd, it works with ISPs to scan their customers’ surfing activities and deliver ads of interest.

According to the USA Today report, NebuAd may be violating a 1986 federal wiretapping law that “requires at least one party to a communication to consent to a wiretap.”

Besides NebuAd, today’s hearing also could examine Facebook's Beacon monitoring tool, which tracked online purchases made by its members and sent alerts to their friends on the site.

In addition, the committee will explore the need for stronger online privacy protections. One issue expected to be discussed is whether Internet companies should be expected to make their programs "opt-in" or whether "opt-out" is acceptable.

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