Watchdog eyes behavioural advertising

The UK’s competition and consumer watchdog has followed the lead of its US counterpart and put the sensitive yet seminal issue of behavioural advertising in its sights.

Addressing businesses, customers and marketers, the Office of Fair Trading said it wanted views before it probes the online advertising practices which could potentially hurt consumers.

The study’s remit includes a look at the use of personal information in marketing, typically where a consumer’s past online activity is used to provide them with tailored promotions.

Online behavioural advertising, or OBA, has become such a contentious issue in the US, largely on the back of misfires from its practitioners, that a set of principles have been issued.

Although the guidelines are industry-led, they were ordered by officials at the Federal Trade Commission, concerned at how companies practising OBA should achieve disclosure.

Keen to embrace a self-regulatory approach, US advertisers promptly drew up some OBA standards in answer to the Fed, which said consumers deserve a choice over such practices.

In a nod to the concerns of US authorities, the OFT said it wanted to keep pace with the constantly evolving way that business advertises, and would particularly focus on the internet.

Its officials also hinted they had not ruled out new regulations, as their study will “look at the application of consumer law” to advertising and pricing models, which may be “detrimental” to consumers.

Instead of recommendations to ministers or regulators, the OFT’s study could prefer to conclude with guidelines, with no force of law, for advertisers, businesses, and/or consumers.

The office added it was prepared to examine advertising practices “where information from a consumer's online activity is used to target the internet advertising he or she receives.”

Specific parties in the private sector will be contacted for their input to help inform the analysis.

But in the meantime, consumers, businesses and other outfits affected by the study’s remit could write in to suggest where it should focus, said Heather Clayton, a director at the OFT.

Reflecting on the market probe, the watchdog invited suggestions for its scope, views and areas of focus no later than September 18, 2009.

It added: “We will consider the responses before finalising the scope and launching the market study in the autumn. At that point, we will set out the final scope of the study and the nature of the work we will be undertaking. There will then be an opportunity for interested parties to make substantive submissions on those issues”.

 

25th August 2009

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