Trade groups agree on online data pact

In a desperate bid to prevent the government from bringing in tough data laws, major advertising industry groups have announced stricter guidelines on how their members use and collect online data.

According to the New York Times the consortium of the trade groups hopes to make concerns in Washington that advertising companies are tracking people too much disappear overnight.

Congress hearings on the subject embarrassed the likes of Facebook, Google and Yahoo. The Federal Trade Commission has urged updated principles for self-regulation.

For years advertisers, agencies and publishers have been arguing that they can keep an eye on their own practices, and don’t need government intervention. However with Washington starting to get excited about legislation it seems to have kick started them into doing something tangible.

The report, “Self-Regulatory Principles for Online Behavioural Advertising,” rubber stamps a lot of the FTC recommendations. It means that by 2010, more than 5,000 companies that belong to the sponsoring organisations, including Google, Microsoft, Yahoo, Disney and Verizon, will adopt the principles.

Amongst these is a requirement to provide notice, either in an ad or on a Web site that behavioural information is being collected. Normally this information would be buried in the small print on the web sites “privacy policy” notice.

It looks like the advertisers will be forced to agree to an enforcement process, so that competitors or consumers can bring complaints if a company violates the principles.

However since this procedure involves refering entities that do not correct violations to the “appropriate government agencies” it is not clear what this will mean. Particularly if there is no real legislation covering such abuse.

Privacy advocates want tougher laws which require consumers to explicitly approve all data collection.