United States: Ad Industry Enforcer Issues Reminder That Notice And Choice Are Musts For Companies Engaged In Interest-Based Advertising And Native Advertising

Last Updated: March 31 2016
Article by Alan L. Friel, Steven H. Goldberg and Maryanne Stanganelli

The Online Interest-Based Advertising Accountability Program (Accountability Program), which enforces the advertising industry's self-regulatory system administered by the Council of Better Business Bureaus, has published the resolution of two formal inquiries into the privacy practices of The Hollywood Reporter (Hollywood) and Varick Media Management (Varick). According to the Accountability Program, both Hollywood and Varick violated the Digital Advertising Alliance's (DAA) Self-Regulatory Principles (Principles) by failing to provide consumers with sufficient notice and choice relating to the collection of data for targeted advertising and the serving of interest-based ads (IBA) on their websites.

These enforcement actions reveal the following takeaways for companies, including advertisers and publishers, engaged in interest-based advertising.

Both First Parties and Third Parties Share Responsibility to Consumers

The Hollywood case involved a website publisher, Hollywood, and a company, Gravity, that displayed interest-based ads on Hollywood's website allegedly failing to provide "enhanced notice" of the interest-based ads as required by the Principles. The Accountability Program took the position that even though Gravity was responsible for serving the interest-based ads, Hollywood shared responsibility and accountability for the failure to provide "enhanced notice."

The takeaway is that both first parties (e.g., website operators) and third parties (e.g., ad networks) share the responsibility of complying with the Principles and will be held accountable when the Principles are not satisfied. Further, while ads typically include notice that will meet the publisher's notice obligation, if an ad is noncompliant, the website will be noncompliant unless the website has its own About Ads link on the page with a deep link to the notice in the privacy policy. There is a need for this link where there are no interest-based ads on the page but the page is dropping tracking cookies, such as for retargeting solutions.

A Privacy Policy Alone Does Not Constitute "Enhanced Notice"

Hollywood's website contained a privacy policy explaining the third-party interest-based ads on the website and including a link to the Network Advertising Initiative's (NAI) consumer opt-out page, where consumers could opt out of interest-based ad activity by the companies listed there. But Hollywood's website lacked any "enhanced notice" distinct from the privacy policy.

As the press release makes clear, the Principles require that all interest-based ads must alert consumers that the ad is based on their prior browsing and provide a link to a short explanation of interest-based ads and an opt-out. In addition, the Principles require that every web page where companies collect consumer data for interest-based ad purposes must place a link or icon next to the privacy policy link that directs consumers to a short explanation of interest-based ads and an opportunity to opt out. While the explanation and an opt-out can be in the privacy policy, the privacy policy itself does not constitute "enhanced notice."

Broken or Missing Links Do Not Constitute "Enhanced Notice"

Varick encountered a different problem. Unlike Hollywood, Varick, both a website operator and an ad network, included an advertising option icon (AdChoices Icon) on each of its interest-based ads to alert consumers the ads were based on their prior browsing. However, Varick's AdChoices Icons did not link to a short explanation of interest-based ads and an opt-out as required by the Principles. Further, Varick's website did not include language adhering to the Principles or an opt-out from Varick's collection practices.

In response to the Accountability Program's recommendation, Varick redirected the links to its privacy policy, amended its privacy policy to include a statement of adherence to the Principles and an explanation of how to opt out of Varick's interest-based ad practices, and ensured TRUSTe's opt-out mechanism included the ability to opt out of Varick's interest-based ads, among other things. The Varick case demonstrates that companies should regularly review the links within their "enhanced notice" to ensure the links function properly.

Native Advertising Also Requires Notice and Choice

The Varick case is also unique in that it involved a company engaging in native advertising. Because native advertising is based on a consumer's interests, the Accountability Program takes the position that companies engaged in native advertising must provide "enhanced notice" and choice the same way they would with interest-based ads.

Comply with Self-Regulation, and Carefully Craft Notices

The latest enforcement actions are yet another example of the Accountability Program investigating consumer complaints and monitoring websites and applications for compliance. The Accountability Program takes the position that the Principles apply not only to DAA members but also to all companies engaged in conduct covered by the Principles. Further, most major participants in the online advertising ecosystem are members of trade associations that have adopted the Principles, and almost all ad agencies, ad servers, and ad exchanges require advertisers and publishers to comply. If you are the subject of an Accountability Program inquiry, respond quickly. The press release stresses that both Hollywood and Varick "swiftly" implemented the Accountability Program's recommendations.

Since the Accountability Program lacks the authority to impose fines or penalties, remediation is the goal. Keep in mind, however, that if a company's public statements are inconsistent with its practices, such as representing adoption of the Principles in a privacy policy but not following the Principles in practice, such noncompliance could be deemed a deceptive practice, subjecting a company to potential prosecution under state and federal false advertising and consumer protection laws. Accordingly, ensure that your practices are in compliance with the Principles and your public statements, and carefully craft your public statements to be accurate and to disclaim third-party acts or omissions you cannot control, such as the effectiveness of third-party opt-out programs. Also be sure not to over represent the technical capacity or scope of opt-out mechanisms, which are relatively limited.

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.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions