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

piling up and DoubleClick, in its SEC
filing, says they’ve been filed so recently that it hasn’t had a chance to
determine their merit.


Bruce v. DoubleClick, filed on January 28, in the
U.S. District Court for the Northern District of California alleges that
the company has secretly intercepted users’ personal data and Web surfing
habits without Internet users’ consent or proper disclosure, allegedly in
violation of Federal electronics privacy statutes. The class action, filed
on the behalf of all people in the US whose “private information was
secretly intercepted”, seeks damages.


On the same day, Healy v. DoubleClick was filed against the company in the
U.S. District Court for the Southern District of New York. The complaint
alleges violations of Federal electronics privacy statutes, as well as
common law trespass and invasion of privacy. This class action suit was
filed on behalf of all users of the Internet.


Donaldson v. DoubleClick was filed February 1st in the U.S. District Court
for the Southern District of New York. The complaint, filed on behalf of
everyone who viewed a DoubleClick-placed ad since 1996, alleges that the
company illegally used cookies for profiling and tracking Internet users
without their knowledge. Donaldson is also seeking an injunction and
damages in the case.

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