Microsoft proposes industry-wide ad standards

14 Apr 2008

Microsoft has submitted to the Federal Trade Commission (FTC) in the US proposals for a self-regulating structure for online advertisers.

Responding to a request from the FTC for comments on its own proposed self-regulatory principles to govern online advertising, Microsoft went one step further and made suggestions for the entire industry.

Microsoft’s recommendations call for distinct privacy standards in five key circumstances: when site visitors’ data is collected for online advertising, when ads are delivered on unrelated sites, when sites engage in behavioural advertising, when personally identifiable information is used and when sensitive personal data is used.

The driving principle behind the proposals is that online advertisers receive affirmative express consent from consumers before they may use sensitive personally identifiable information — such as personal health information — for advertising purposes.

One of the recommendations is that organisations that keep records of page views or collect other information about consumers for the purpose of delivering ads or ad-related services on their own sites should post a privacy policy on the home page, implement reasonable security procedures and retain data only as long as necessary to fulfil a legitimate business need or as required by law.

It also proposed that entities that engage in delivering online ads or services across unrelated third-party sites should ensure that consumers receive notice of the privacy practices of those sites, and that entities that seek to develop a profile of consumer activity to deliver advertising across unrelated third-party sites should also offer consumers a choice about the use of their information for such purposes.

Also submitted was a proposal that third parties that rely on personally identifiable information — such as a name, email address, physical address or phone number — for delivering ads or related services across multiple sites or for behavioural advertising should, at a minimum, give consumers the ability to opt out of having personally identifiable information collected for the purpose of targeting ads.

Third parties should also be required to obtain affirmative express consent before using sensitive personally identifiable information — such as health or medical conditions, sexual behaviour or orientation, or religious beliefs– for behavioural advertising, suggested Microsoft.

“We welcome the opportunity to work with the FTC to ensure that online consumers benefit from meaningful privacy protections,” said Brad Smith, senior vice-president, general counsel and corporate secretary, Legal & Corporate Affairs, Microsoft. “Online advertising should put consumers in the driver’s seat, not only with the information they want to see, but also with the tools to protect their privacy.

“Even as consumers value the benefits of online advertising, they may not fully appreciate the role data collection plays in the delivery of online advertising. Microsoft’s proposed guidelines will help consumers receive relevant and helpful information while helping ensure their privacy is respected.”

By Niall Byrne