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Congress Opens Debate on Behavioral Advertising

Businesses say tracking users' online behavior is a benefit; privacy advocates say it's a threat

On Capitol Hill today, two opposing sides fired the first shots in what promises to be a heated debate over whether or not Internet service providers and other businesses should be allowed to track users' behavior in detail as they travel across the Web.

At issue is the emerging technology offered by companies such as the U.S.-based NebuAd and the U.K.-based Phorm, which are currently doing trials with ISPs to study users' clickstreams and deliver banner advertising that is tailored to their online behavior. Some of these trials have come under hailstorms of criticism from privacy advocates, and in some cases, ISPs have chosen to postpone the rollout of new services until privacy issues have been addressed.

In testimony today before the Senate Committee on Commerce, Science, and Transportation, legislators began grappling with the benefits and dangers associated with behavioral advertising.

So far, there is no proposed legislation on the practice in Congress, but some privacy advocates say there should be, and others say NebuAd and Phorm could be classified as spyware that is illegal under current law.

Leaders of the subcommittee appeared mostly to be in fact-finding mode, but several expressed concerns over the practice of behavioral advertising.

"Too many consumers spend time on the Internet without knowledge or notice that they are under commercial surveillance," stated Sen. Daniel Inouye (D-Hawaii), who chairs the subcommittee. "They assume they are in the privacy of their own home and that this privacy will be respected. Unfortunately, this is not always the case."

Bob Dykes, CEO of NebuAd and a former executive vice president at Symantec, says his company's technology is only an extension of current practices for tracking online behavior and poses no threat to user privacy. The system is designed to track activity without collecting personal information or allowing the ISP to trace behavior back to a specific user, he said.

But Leslie Harris, president and CEO of the Center for Democracy and Technology, notes that the current federal Wiretap Act prohibits the interception and disclosure of electronic communications -- including Internet traffic content -- without the user's consent. While there is an exception in the law that allows providers to collect data that is "necessary to render service," behavioral advertising should not be "shoehorned" into that exception, Harris said.

Harris urged the legislators to pass basic laws that would allow users to opt out of all forms of Internet tracking.

Jane Horvath, senior privacy counsel at Google, noted that the search engine currently provides capabilities such as Web history, which allows the user to delete information about surfing activity or stop data collection.

"Clearly, as a technological phenomenon, mass transactional data tracking and collection are here to stay," said Wayne Crews, vice president for policy at the Competitive Enterprise Institute.

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