BBB Will Enforce New Consumer Disclosure Requirements

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pa-privacyThe Better Business Bureau (“BBB”) has quietly been asserting more influence over mobile and Internet marketing practices over the past year, endorsing several self-regulatory principles drafted by the Digital Advertising Alliance (“DAA”), a nonprofit organization comprised of some of the largest media and marketing trade associations in the U.S.  Now, for the first time, the BBB has issued a compliance warning to website operators that gather consumer data for online behavioral advertising without the required consumer disclosure language.

Prior BBB Endorsed Self-Regulatory Principles

Regarding marketing practices conducted on the Internet, the BBB administers the Online Interest-Based Advertising Accountability Program (the “Program”), which imposes privacy restrictions on companies that track consumers’ online activities for targeted marketing purposes.  By releasing decisions in its first six (6) compliance cases, the BBB illustrated the principle that companies have the obligation to monitor their data collection and advertising practices to ensure that their notice and choice mechanisms are fully compliant with the Program.

Moreover, on the heels of recent developments affecting how mobile applications (“Apps”) collect, use and share consumers’ personally identifiable information, the DAA released guidance, which applies consistently across marketing channels and extends to App developers and owners, ad networks, App platform providers and providers of related third party services.  Specifically, the guidance requires that App developers/owners provide consumers with clear, meaningful and prominent notice of their information collection and sharing practices, including listing any third parties with whom the information is shared and a link that consumers may use to opt-out of or restrict the collection, use and/or sharing of their information.

New BBB Online Behavioral Advertising Self-Regulatory Principles

Recently, the BBB endorsed the DMA’s self-regulatory principles relating to the collection of consumer information for purposes of online behavioral advertising.  For those that are unaware, online behavioral advertising encompasses a broad set of activities aimed at collecting information relating to consumers’ online activity in order to present advertisements or content believed to be most relevant to each individual consumer.  If used properly, online behavioral advertising can benefit all parties involved.  The DMA principles were promulgated in order to establish a baseline framework for the responsible use of online behavioral advertising by website operators.

In essence, the latest DMA principles require that website operators each provide a “clear, meaningful and prominent link” on their website(s), which connects to a webpage containing required disclosures of the applicable website’s data collection, use and sharing practices with respect to online behavioral advertising.  In order to prevent any confusion, the DMA has provided an example of a compliant disclosure webpage.  As previously mentioned, the BBB recently issued a warning letter to websites that were engaged in online behavioral advertising practices without including the mandated disclosures.  Beginning January 1, 2014, any website that is not in compliance with the new self-regulatory principles may face a BBB enforcement action.

If you are interested in learning more about this topic or pursuing an Internet marketing venture, please e-mail us at info@kleinmoynihan.com or call us at (212) 246-0900.

The material contained herein is provided for informational purposes only and is not legal advice, nor is it a substitute for obtaining legal advice from an attorney.  Each situation is unique, and you should not act or rely on any information contained herein without seeking the advice of an experienced attorney.

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