Can the IAB Save Online Ad Industry From Government?

Accused of dragging its feet on privacy, the online ad industry is taking more drastic measures to fend off government regulation. On Sunday, the Interactive Advertising Bureau announced that its online self-regulatory program will now be mandatory for members, following the lead of the Direct Marketing Association, which made a similar announcement last month.

This more drastic move to keep the government off the industry’s back comes about two weeks before the Senate Commerce Committee will hold a hearing on online privacy.

“We need to prove we’re serious about self-regulation,” said Alison Pepper, director of public policy for the IAB.

The new code also clears the way for the Federal Trade Commission to prosecute companies that are out of compliance, Pepper said.

“It’s a hook for the FTC. If companies agree to the code of conduct and they aren’t complying, then the FTC can go after the company,” Pepper said.

The FTC’s David Vladeck, the director of the bureau of consumer protection, was hard on the industry in December when the FTC issued its report, saying that “self-regulation has not kept pace with technology.” He may be softening that position now.

“The online advertising industry should be commended for its continued efforts to improve consumer privacy after release of our staff report in December,” Vladeck said in a statement provided to Adweek. “Enforceability is a critical component of any industry effort to give consumers choices about online advertising, and the adoption of mandatory privacy practices for IAB members represents positive progress in this area.”

IAB members have six months to get into compliance. The Council of Better Business Bureaus will handle the enforcement by monitoring Web sites and accepting competitor and consumer complaints.