CDT Charges ISP Ad Scheme Might Be Illegal
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WASHINGTON--If the recent press wasn't bad enough already for NebuAd, a public interest watchdog group today released a report suggesting that the Redwood City, Calif-based startup's controversial plan to target ads according to people's browsing habits collected from Internet service providers (ISPs) might be illegal.
At a meeting with reporters here at the headquarters of the Center for Democracy and Technology (CDT), the group laid out a legal argument alleging that ISPs that engage in NebuAd's program could run afoul of the 1986 Electronic Communications Privacy Act (ECPA) -- also known as the Wiretap Act -- as well as several states' privacy laws.
"Advertising per se is not considered the evil," said CDT President and CEO Leslie Harris. "It's the collection of individuals' information -- usually without their knowledge -- always without their consent, the creation of profiles, and the complete inability of people to make informed choices about that."
The concerns raised by the CDT echo a larger debate over the targeting of ads based on what people do online and an individual's right to privacy that has been building steam over the past several months, drawing scrutiny from the Federal Trade Commission and prominent lawmakers of both parties.
NebuAd, which declined to comment for this story, pitches its service to ISPs as a way to bring them into the online advertising revenue stream. The company pays ISPs to install a hardware client that collects information about their subscribers' Web activities, which NebuAd then uses to place ads tailored to people's interests. A British company called Phorm engages in a similar practice.
"The ISP sits in a different position than a Web site," Harris said. "They are sort of the only trusted intermediary between the ends of the network. What comes over those pipes is an order of magnitude in terms of the range of information simply different than an ad network."
NebuAd's claim that it doesn't collect any personally identifiable information has met with considerable skepticism.
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