RealTime IT News

Doubleclick in Discussions to Settle Privacy Dispute

Ad giant DoubleClick is in talks with the state of Michigan in an effort to ward off a threatened lawsuit over the company's privacy practices.

The State of Michigan Attorney General's office on February 17 initiated legal proceedings against DoubleClick, alleging that the company illegally failed to disclose to Internet users that it was placing cookies on their hard drives.

The "notice of intended action" warned DoubleClick that a lawsuit would be filed if the company didn't enter into talks about halting the illegal actions and providing remedy for past offenses.

"DoubleClick is currently holding discussions with Attorneys General from a few states around the country," said Josh Isay, director of public policy at DoubleClick.

"We can't comment on the state of the negotiations but we are cooperating fully."

Other than Michigan, Connecticut and Vermont are reportedly involved in discussions, but those offices didn't immediately return calls. The New York State Attorney General's office confirms its inquiry into DoubleClick. It started talking with the company in January, and now says it hopes to soon resolve the issues.

"We have been in discussions for quite some time in an effort to resolve some of the privacy issues," said Juanita Scarlett, a spokesperson for the New York Attorney General's office.

DoubleClick also faces possible trouble at the federal level. The Federal Trade Commission is conducting an informal inquiry into the company's practices. DoubleClick also is a defendant in several class action lawsuits.

Privacy concerns intensified after DoubleClick acquired Abacus Direct and said it would merge offline purchase information in the company's databases with data gathered online through the use of cookies. Since the company postponed those plans, saying that it would wait until there is agreement on standards, the pressure has let up a bit.

Still, that postponement doesn't affect the use of cookies, which DoubleClick uses to better target ads. The more highly-targeted the ad, the higher the rate DoubleClick can charge advertisers, simply because more the ads are more likely to reach potential customers.

"DoubleClick is committed to both protecting consumer privacy and keeping the Internet free by delivering ads targeted to consumers interests," said Isay.