Online Interest-Based Advertising Accountability Program Formal Review: 03.2011

ONLINE INTEREST-BASED ADVERTISING ACCOUNTABILITY PROGRAM

FORMAL REVIEW

Case Number: 03-2011

COMPANY:

Reedge, Inc.

CHALLENGER:

Online Interest-Based

Advertising Accountability Program )

DECISION DATE:

November 8, 2011

SYNOPSIS

Under the Consumer Control Principle, a company is required to set an opt-out cookie

with a minimum expiration date of five years from the date on which a consumer

exercises choice.

COMPANY STATUS

Reedge, Inc. (Reedge or the company) is engaged in online behavioral advertising

(OBA)¹ as defined in the cross-industry Self-Regulatory Principles for Online Behavioral

Advertising (Principles):

Online Behavioral Advertising means the collection of data from a

particular computer or device regarding Web viewing behaviors over time

and across non-Affiliate Web sites for the purpose of using such data to

predict user preferences or interests to deliver advertising to that computer

or device based on the preferences or interests inferred from such Web

viewing behaviors.  (Principles at 9-10, Definition G.).

OBA PRACTICE AT ISSUE

One of the cornerstones of the Principles is “consumer control.”  (Principles at 14,

Principle III.). A third party must provide the consumer with an easy-to-use mechanism

that allows the consumer to exercise choice regarding the collection and use of data from

his or her device for OBA purposes.  The practice at issue is whether the company was

providing consumers with choice as required under the Consumer Control Principle.

The obligation of a third party to enable a consumer to exercise choice is explained in the

Principles as follows:

A Third Party should provide consumers with the ability to exercise choice with

respect to the collection and use of data for Online Behavioral Advertising

purposes or the transfer of such data to a non-Affiliate for such purpose.  Such

choice should be available from the notice described in II.A.(2)(a); from the

industry-developed Web page(s) as set forth in II.A.2.(b)(i); or from the Third

Party’s disclosure linked to from the page where the Third Party is individually

listed as set forth in II.A.2.(b)(ii). (Principles at 14, III.A.).

BASIS OF INQUIRY

On August 22, 2011, the Online Interest-Based Advertising Accountability Program

(Accountability Program) tested the functionality of the consumer choice mechanism

using five Internet browsers: Chrome, Firefox, Internet Explorer, Opera and Safari.

While the opt-out request was successfully processed in each test, the opt-out cookie

delivered to each browser was set to expire one year from the date of the test.  The one

year expiration date falls short of industry standards.

The Principles are built on consensus standards: “The cross-industry Self-Regulatory

Program for Online Behavioral Advertising was developed by leading industry

associations to apply consumer-friendly standards to online behavioral advertising across

the Internet.” (Principles at 1).  The industry standard for the duration of an opt-out 3

cookie is five years from the date of the request².

Repeated tests of the choice mechanism continued to find the short expiration date,

demonstrating that the problem was persistent and was not corrected by the company

during the month that testing was repeated.

COMPANY’S POSITION

In response to the Accountability Program’s inquiry, the company acknowledged that the

opt-out cookie delivered to the consumer’s browser contained an expiration date of one

year from the date of the opt-out request.  The company stated that upon receipt of the

notice of inquiry, it immediately changed the opt-out cookie’s expiration date to the fiveyear time frame that is the industry standard.

DECISION

All companies have the obligation to monitor their data collection and advertising

practices to ensure compliance with the Principles, including ensuring that their notice

and choice mechanisms are fully compliant with the Principles at all times.  The

Accountability Program finds that Reedge was not compliant with the Consumer Control

Principle because it failed to ensure that its consumer choice mechanism contained an

expiration date consistent with the industry standard minimum of five years.

Upon notification by the Accountability Program, the company changed the opt-out

cookie’s expiration date to five years from the date of the request.  The Accountability

Program has conducted subsequent tests on the opt-out mechanism on all browsers

previously tested and found the expiration date for the opt-out cookie to meet the fiveyear minimum as required by the industry standard.

CONCLUSION

The Accountability Program’s goal is to ensure that companies engaged in OBA comply

with the Self-Regulatory Principles.  The Accountability Program’s monitoring and

complaint processes are designed to identify areas of possible non-compliance, to make

companies aware of potential non-compliance and to work with companies to rectify noncompliance.  Reedge has implemented the Accountability Program’s recommendations

and the practice at issue has been resolved.

COMPANY’S STATEMENT

Reedge changed the opt-out to match the five (5) year time-frame suggested.  We also

adjusted out internal opt-out procedure deleting all data connected to the unique cookie

(if it was present).

Thank you for your support in making the business better using self-regulation.

DISPOSITION OF DECISION

Practice voluntarily corrected.

1. The company states that its “ online software segments website visitors and dynamically modifies website content to match each individual visitor profile to improve user conversion, improve customer service and make websites operate more efficiently.”

http://www.reedge.com/our-company/about-us (last visited on October 29, 2011).

2. As the Aboutads.info web site explains to consumers who wish to exercise choice, “Opt out cookies storing such preferences that are placed by companies participating in the Program have a minimum fiveyear lifespan, and remain in effect for the user’s browser unless these opt out cookies are deleted (as can happen if users deletes all of their cookies using browser tools).”  See also Chitika, Inc., FTC Docket No. C-4324 (June 7, 2011) (requiring Chitika to provide a five-year opt out)