Copyright (c) 2009 UC Hastings College of the Law
Hastings Communications and Entertainment Law Journal (Comm/Ent)
Article: Targeting Bad Behavior: Why Federal Regulators Must Treat Online Behavioral Marketing as Spyware
HASTINGS COMMUNICATIONS AND ENTERTAINMENT LAW JOURNAL
31 Hastings Comm. & Ent. L.J. 369
Heather Osborn Ng*
I. The Practice of Online-Targeted Advertising
The Federal Trade Commission ("FTC") has sanctioned more than a dozen companies during the past two years for privacy violations involving the improper installation of spyware software on personal computers. 1 The spyware software allowed companies to watch and control a consumer's online activities, either without the consumer's knowledge or with the consumer's knowledge but without reasonable means for the consumer to stop it. 2 The practice of online-targeted advertising raises similar privacy issues as the use of spyware software because it also involves behind-the-scenes tracking, which most consumers never notice. 3 Online-targeted advertising allows marketing companies to engage in the same behavior as companies who use spyware - watching the consumer's Internet actions, often without the consumer's knowledge or with the consumer's knowledge but without meaningful consent or without offering the consumer the ability to stop it. 4 Nonetheless, the FTC has not brought a single action against a company that engages in improper online-targeted advertising.
The FTC's inaction highlights the need for legislative action and appropriations that spur the FTC to crack down on inappropriate online-targeted advertising. Aside from federal privacy laws that regulate financial institutions and a few state laws that require certain privacy notices to appear on websites, online-targeted advertising is largely unregulated, which permits abuse. 5
Notably, self-regulation has failed to end advertising companies' damaging practices - such as tracking online activity without full disclosure to consumers and making opt-out procedures ...
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