United States: Five Takeaways From The DAA's Recent Cases Involving Interest-Based Ads

As we have previously chronicled here and here, the Digital Advertising Alliance (DAA) continues its sweep of interest-based advertising (IBA) through its enforcement vehicle, the Better Business Bureau's Online Interest-Based Advertising Accountability Program (OIBAAP). Two recent OIBAAP decisions involving web publisher Hollywood Reporter and programmatic advertising agency Varick Media Management provide further guidance on the online advertising industry's focus on transparency and consumer control of IBA. Publishers that serve IBA ads on their site or allow IBA cookies to be associated with their users, including for the publisher's own serving of ads to users when they leave the site (i.e., retargeting), should confirm they are in compliance with the DAA's Self-Regulatory Principles for Online Behavioral Advertising (the "OBA Principles"), particularly the obligation to give notice on every webpage where IBA activities occur. That includes making sure that notice links work, notices are complete and accurate, and opt-outs are effective.

In the Hollywood Reporter and Varick Media Management decisions, the OIBAAP found that both companies failed to comply with the DAA's OBA Principles. Specifically, the companies did not fully implement the transparency and consumer control obligations of the OBA Principles. Section II of the OBA Principles (the transparency obligations) require third parties and service providers to give "clear, meaningful, and prominent" notice on their own websites that describes their own online behavioral advertising data collection and use. Additionally, under section II, when a website operator allows nonaffiliate third parties to collect or use data for IBA on its own website, the website operator must ensure that an enhanced notice link appears on every page where this collection or use occurs. This link must direct consumers to a disclosure of nonaffiliate IBA activity occurring on the website. Additionally, this disclosure must either link consumers to an industry-developed opt-out page (e.g., http://aboutads.info/choices) or list every third party engaged in IBA on its website and provide links to each third party's opt-out tool. Under the consumer control obligations (section III of the OBA Principles), companies involved in the collection and use of data for online behavioral advertising purposes are required to provide users with a means of controlling the collection and use of this data.

In the Hollywood Reporter decision, the OIBAAP found that although its website provided consumers with a disclosure explaining the third-party IBA activity and directing consumers to an industry-developed opt-out website, the Hollywood Reporter website lacked an enhanced notice link on every webpage where the ads appeared. OIBAAP found that the required IBA disclosure and opt-out link were located within Hollywood Reporter's privacy policy. This placement of the IBA disclosure and link, however, failed to meet industry standards because the OBA Principles require first-party website operators to "place a 'clear, meaningful, and prominent' link—distinct from the company's privacy policy link—on its website that takes consumers directly to the first party's IBA disclosure, not just to the top of the privacy policy page where it is contained. The enhanced notice link must appear on every page of the first party's website where third-party data collection or use for IBA occurs." Hollywood Reporter also failed to include a statement of adherence to the OBA Principles.

In the Varick Media Management (Varick) decision, the OIBAAP found that Varick failed to comply with both its first-party and third-party obligations under section II of the OBA Principles and failed to implement an easy-to-use consumer choice mechanism under section III of the OBA Principles. First, Varick failed to provide disclosure of its own IBA activity. Furthermore, Varick's in-ad AdChoices icon failed to work properly, and it was impossible to opt out of Varick's IBA practices. Second, Varick's vendor-provided enhanced notice and opt-out links were inaccurate or outdated. Third, the OIBAAP found that Varick failed to implement a mechanism to give consumers control over the collection and use of data for IBA purposes.

There are five takeaways from these two decisions:

(1) All interest-based ads must include a notice alerting consumers that the ad is based on their prior web browsing and provide an opt-out opportunity.

(2) Every webpage where companies are using tracking technologies or collecting consumers' data for IBA must alert consumers to the collection with a link to a robust notice, including opt-out opportunity information. It is not sufficient to hide this notice within a privacy policy.

(3) Consumers must be offered an easy-to-use IBA choice mechanism that gives consumers control over the collection and use of data for IBA.

(4) Both cases recognize that in the advertising industry companies may play multiple roles and have overlapping obligations under the OBA Principles. The OIBAAP continues to remind companies to coordinate with each other throughout the IBA process to ensure compliance with their shared responsibilities under the OBA Principles.

For example, in the Hollywood Reporter decision, the OIBAAP stated:

First parties sometimes believe—mistakenly—that the requirement for providing enhanced notice lies solely in the domain of third-party advertising companies. Third parties sometimes believe—equally mistakenly—that the responsibility for enhanced notice of third-party collection for IBA rests solely with the first party. However, as the commentary to the Principles makes clear, while either first or third parties may satisfy the requirement to provide enhanced notice on a given webpage, both parties bear independent responsibility for ensuring that each page where IBA occurs contains a compliant enhanced notice link. As a result, companies must communicate with one another to ensure that the provision of an enhanced notice link is not lost amid unspoken assumptions or vague commitments.

(5) The Varick case demonstrates that compliance is an ongoing responsibility. Companies must ensure that their enhanced notices and opt-out links work and provide the necessary information to consumers.

We will cover any further developments from the DAA as it continues its IBA enforcement in the desktop and mobile environments. For more information on IBA issues, contact the authors.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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