Privacy Groups Challenge DoubleClick Settlement

Two privacy groups are challenging DoubleClick’s proposed class-action settlement, claiming the agreement fails to require the Web advertising giant to significantly alter its consumer data policies.

Earlier this week, the Electronic Privacy Information Center and Junkbusters, Inc., jointly filed a formal objection to DoubleClick’s settlement proposal for several pending class-action lawsuits in U.S. District Court for the Southern District of New York. The settlement is due to be reviewed by the court in a public hearing on May 21.

DoubleClick, which is barred from commenting on the objection through terms of its settlement, is expected to file a response before the hearing.

In March, DoubleClick proposed a settlement to end the two-year-old suits, which had been filed on behalf of consumers who accused the company of wrongfully collecting and using their personal information. The lawsuits came on the heels of DoubleClick’s since-halted plan to integrate personally identifiable consumer information with data culled from online cookies.

Through the settlement proposal, which has received approval by the co-lead plaintiffs’ counsel, DoubleClick agrees to safeguard and routinely purge data collected online, to limit cookies’ lifespans, to submit to reviews by independent privacy auditors, and to launch a consumer education campaign.

Additionally, the settlement stipulates that DoubleClick will continue giving “clear notice” of its data-collection policies, and will also ask consumers before it undertakes any sort of (currently theoretical) effort to combine their personally identifiable information with previously-collected clickstream data.

DoubleClick also agrees to ensure that Internet users’ information is used in accordance with the privacy policy under which it was collected, unless the consumer has given permission to do otherwise. The company also said it would begin taking steps to ensure that any acquirer would follow suit.

Through the settlement, the firm also assumes responsibility for the cases’ legal fees and costs, which could run as high as $1.8 million. (DoubleClick already accounted for such charges in its operating expenses from previous quarters.)

In return, DoubleClick admits no wrongdoing, while all the state and federal-level class action suits pending against the firm are dropped.

But the privacy groups contend that the settlement provides little in the way of new, significant benefits to consumers.

In their objection, the groups maintain that the settlement fails to expand on policies of the Network Advertising Initiative, an industry self-regulatory body of which DoubleClick is a founding member. The NAI guidelines, while having received endorsement by the Federal Trade Commission in 2000, have been highly criticized by consumer advocates because of alleged shortcomings in protecting consumer privacy, such as through its predominantly “opt-out” policy.

“By agreeing to the proposed settlement, DoubleClick has not made any significant change to its practices or its policies nor has it provided the type of meaningful privacy protection sought by consumer and privacy organizations that brought the … complaint to the Federal Trade Commission in the first instance,” the objection reads. “…it is important to make clear that the proposed settlement fails to match those commitments to which DoubleClick is already bound, and … that stronger obligations should be imposed on a company, such as DoubleClick, that routinely engages in the practice of monitoring and profiling individuals who use the Internet.”

Specifically, the objection criticizes the settlement for not requiring more detailed disclosure of DoubleClick’s and its clients’ profiling systems. It also states that the settlement doesn’t provide adequately for the protection of consumers in future DoubleClick data-collection and analysis plans, and that it also doesn’t give consumers full access to the company’s collected profiles — all of which fall short of NAI policies, the groups say.

Additionally, the groups argue in the objection that DoubleClick’s monetary payment should benefit consumers as a class, rather than just covering attorney fees for the private litigants.

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