In a controversial decision the FTC stamped its seal of approval on a list of self-regulatory principles created by the National Advertising Initiative, NAI, a coalition of top online advertisers.

The principles are meant to insure privacy for net-users by guarding against unwanted data collection. But privacy advocates claim that despite these new regulations online data collection regulations are still far too intrusive. However, the NAI maintains that these regulations provide easy options for users who don't want their online actions recorded.

After reaching a consensus on the measures, the FTC will now send a recommendation to the Senate Commerce Committee, where Congress will take the measures under advisement when crafting an online privacy act.

The NAI is comprised in part by Alley-based advertising agencies like DoubleClick, 24/7 and Real Media. The NAI intends the following regulations on data collection:

* Users are to be given the opportunity to opt out of the collection of anonymous data on the Internet for the purpose of personal profiling.

* Users are to be given a chance to determine if they want to allow previously collected anonymous data to be merged with personally identifying information, creating a personal profile that can be used for the purposes of targeted advertising.

* Users have the right to give permission for the collection of personally identifying information at the time and place it is gathered on the Internet for the purpose of creating a personal profile.

However, online privacy advocates like Epic.org and Junkbusters.com are far from mollified. They believe that the regulations are part of a thinly veiled attempt on the part of ad agencies to satisfy the public while continuing with their "intrusive" data collecting activities.

Both groups were particularly concerned about online profiling and data collection when DoubleClick merged with Abacus Direct in June of 1999, a move that combined the data pools of the two agencies. Online ad agencies, like DoubleClick, are able to track users with cookies, and using a combination of anonymous and personal information from their enormous data pool, these agencies build personal profiles about users. Once a profile is built they have easy access to a user's personal affinities. They then directly target those interests with banner advertising.

Mark Rotenburg, the Executive Director of the Electronic Privacy Information Center, Epic.org, said this proposal "turns every American family into a Nielson family rating system. This is a form of advertising that is far more intrusive than what is standard."

Rotenburg believes the main problem with the regulations is that users are required to opt-out of data collection instead of opting-in, which presumes they will be followed unless they take the responsibility of notifying ad agencies every time they want their actions to be private. "This places an unreasonable burden on users to opt out with so many parties following them around."

In addition to this, consumers will not have the right to see the information that's being collected about them.

"That's not a decision they get to make, it's a decision the user gets to make", said Rotenburg.

The President of Junkbusters.com, Jason Catlett believes the intrusive nature of the data collection is contrary to a users rights, "we shouldn't be used to support the questionable business models of a bunch of data mongers."

The NAI has already agreed to put the self-regulation principles into effect while Congress considers the Commission's recommendations concerning online profiling. But Rotenburg and Catlett both said that since online ad agencies possess such sophisticated tracking technology these regulations will do little to protect consumer's privacy.

"Since the net is so intrusive, a higher bar must be set," said Rotenburg,"When you create profiles there are unique privacy rules that need to be observed. That's the way it's done in the fair credit act, users have the right to know what's being collected."

NAI spokesman, Jeff Connaughton said the NAI has agreed in principle to provide users access to their information. While the details of such an arrangement haven't been completely worked out, Connaughton says members of the NAI intend to insure that users are given access to personally identifiable information.

In the meantime, Connaughton continued, opting-out would not place undue stress on users because the NAI is setting up a central Web location on their site where users can go to opt-out of any data collection. And the NAI intends to educate the public about its privacy choices.

In response to the opt-out disagreement, Connaughton said the regulations provide a significant opt-in component that's ignored by its critics. Since the user is asked whether they mind if personal information is merged with anonymous data, they can opt-in to this manner of profiling if they so desire.

The NAI constitutes over 90% of the network advertising industry and is pushing for legislative action from Congress to ensure the remaining 10% of ad agencies on the Net follow the regulatory principles adopted by the FTC.

For more information about opt-out/opt-in, visit www.networkadvertising.org

*Sam Rosales (srosales@internet.com) is an assistant editor with atNewYork.com