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DoubleClick's Legal Troubles Deepen

Advertising industry leader DoubleClick is facing no fewer than four lawsuits alleging its privacy practices are unlawful, according to documents filed with the Securities and Exchange Commission.

All of the suits have been filed over the last two weeks, as the pressure privacy advocates have been placing on DoubleClick (DCLK) has intensified. The legal problems coincide with an e-mail campaign launched by the Center for Democracy and Technology (CDT), an organization that advocates for privacy.

The concerns center around DoubleClick's collection of online consumer behavior in "cookies" and its recently-revealed intentions to cross-reference that data with the offline consumer databases it acquired with the purchase of Abacus Direct.

Some of the legal arguments involve issues specific to DoubleClick, because of its Abacus Direct acquisition, but others, because they criticize the company's collection of data with cookies, may have larger implications for the online advertising industry.

DoubleClick's public comments about the controversy have been limited to the privacy policy published on its web site, and a brief statement that reads, "DoubleClick is absolutely committed to protecting the privacy of all Internet users, and to providing consumers with notice and choice. We have been a leader in setting the standards for consumer privacy online, and our privacy policies always have and always will place the consumer first."

After Harriet Judnick filed suit against the company in Marin County, California, on January 27th, Bruce v. DoubleClick and Healy v. DoubleClick were filed the next day. On February 1, Nancy Donaldson of California filed her suit. The most recent three lawsuits, all of them class action suits, cite federal electronic privacy laws, while the first relies on California law.

At the same time, the CDT mounted an e-mail campaign to some of the Web site publishers that comprise the DoubleClick network. That e-mail barrage asked publishers to refrain from providing DoubleClick with personally identifying information about users of their sites, because it is that data that will allow DoubleClick to match its online and offline data.

The campaign sparked a firestorm of controversy. Publishers, many of whom were themselves confused about how DoubleClick was using cookies, may have received as many as 4,300 e-mails sent through the CDT Web site. That heavy volume was considered spam, by some, and they felt that they were being wrongly targeted.

The response from publishers, and appeals to its ISP, prompted CDT to disassemble its form letter to DoubleClick network members, although the organization still allows site visitors to e-mail those publishers that haven't responded to the campaign. Those who did respond, usually with assurances about their intentions to keep members' personally identifying information from DoubleClick, had their responses posted on the CDT site.

"We share everyone's concern about maintaining privacy on the Internet," said Joe Krakoviak, with APBOnline.com. "We are very pleased that they have taken down that portion of their site."

Besides ABPOnline.com, sites like The New York Times, Comedy Central, Ask Jeeves, and Alta Vista were on the CDT list of DoubleClick network members.

"[The campaign] was very successful in getting the companies' attention," said Ari Schwartz, policy analyst with the CDT.

The lawsuits, meanwhile, have been