By William G. Korver, Reporter, BroadbandCensus.com

WASHINGTON, July 8 – Online advertising firm NebuAd is violating individual users’ privacy, and possibly state and federal laws, officials at the Center for Democracy and Technology (CDT) said at a Tuesday briefing on a report.

But in order to allow consumers to opt-out of the NebuAd-advertising model, Congress must pass laws forcing such companies to become more transparent, said two CDT officials, plus a key consultant, at the Tuesday briefing. The event was co-sponsored by CDT, plus Free Press and Public Knowledge, two other non-profit groups.

Robb Topolski, a consultant who authored a June 18 report, published by Free Press and Public Knowledge, accused NebuAd of paying internet service providers (ISPs) to allow NebuAd to eavesdrop on web users and place packets into responses from websites in order to “force-load” cookies on internet users’ computers. NebuAd is an online advertising firm.

CDT President Leslie Harris and Vice President Ari Schwartz, plus Topolski, counseled legislators against falling into the trap of “lumping” NebuAd’s tactics with that of other internet issues and players. The CDT report and press briefing come one day ahead of a Senate Commerce Committee hearing on Internet behavioral advertising.

Harris said that the NebuAd online advertising approach “appears to defy” consumer expectations and “violate” state and federal wiretapping laws. She said that the Federal Trade Commission needs to issue “enforceable guidelines” instead of mere drafts of suggestions.

NebuAd has yet to fully disclose whether or not it ceases to collect information from a user even after the user elects to no longer be the target of NebuAd’s controversial behavioral profiling, she said.

Behavioral profiling is the tracking of a user’s web site visits, search terms, online purchases, and “click through” responses to advertisements in order to infer the interests, habits, and associations of the user.

Harris also said that a “privacy regime” is needed to replace the current “broken” one.

While federal law would likely allow the practice “with the consent of the subscriber,” the user’s consent should not be gained through a “terms of service” agreement or a billing statement, said the 13-page CDT report. Individual state laws also may require the consent of consumers for such an advertising model to be legal, said Schwartz.

Furthermore, lawmakers should bear in mind that NebuAd, while maintaining that it does not collect user data, has never said whether it sees and analyzes such data, said Topolski.

Such a possibility is extremely unnerving, he said. Data relating to the real-time performance of advertising competitors would be available to NebuAd. Internet compatibility, innovation, and investment may all be threatened by NebuAd business model, he said.

CDT wants Congress to pass legislation barring internet service providers from permitting advertising networks to copy the web traffic streams of the internet subscribers without users’ consent.

”Clear notice and prior [user] consent” must be given in order for user data to be collected according to the new NebuAd model, said Schwartz.

Documents Referenced in this Article:

Center for Democracy and Technology Report on NebuAd (PDF)