NARC Moves to Enforce Industry’s Digital Privacy Standards

Six ad networks found to be out of compliance

There was some fortuitous news for the advertising industry out of Washington Tuesday: At a time when the industry is trying to demonstrate to government regulators that it can police itself when it comes to protecting consumers' privacy online, the National Advertising Review Council has successfully cited and resolved the first six cases regarding noncompliance with its self-regulatory program. 

All six cases involved ad networks—Media Extension, Martini Media, PredictAd, QuinStreet, Reedge, and Veruta (MyBuys)—that were found to be out of compliance with the industry's principles for online behavioral advertising. According to NARC, after the companies were contacted, they all voluntarily corrected the problems, which primarily involved opt-out periods shorter than the program's five-year standard or links to opt-out mechanisms being missing entirely. 

With Congress, the Federal Trade Commission, and the Department of Commerce all looking at ways to tighten consumer privacy on the Internet, advertisers are all too aware that enforcement of self-regulation is critical to keeping legislators and regulators at bay.

"I hope regulators and legislators see these first decisions as a strong indication that we take accountability seriously," said Genie Barton, the director of the accountability program for NARC, which is administered by the Council of Better Business Bureaus. "None of these companies did anything egregious or deceitful. They weren't watching their technology as closely as they should. I was amazed at how fast they got back to us."

NARC, which covers the entire advertising ecosystem, not just member associations, is one of two independent enforcement programs the advertising industry relies on to make sure all companies comply with the industry's privacy principles for online behavioral advertising.

Jon Leibowitz, chairman of the FTC called NARC's six enforcement actions "a promising start" in a speech delivered Tuesday in New York at Ad:Tech. "Not every self-regulatory program includes real accountability, but the ones that do work better and generally are able to avoid a more regulatory heavy hand from Congress," Leibowitz said. 

Though privacy is getting a lot of attention in Washington, bills are all but stalled in Congress, and final reports from the FTC and Commerce have yet to be released.

Advertisers believe they can do a better job and react more quickly to the marketplace than regulators. 

"Congress has been looking to do something forever. We can act quicker," said Barton. "We're ahead of where the FTC wants to move."

NARC's Barton said more compliance reports will be issued at regular intervals. "It's very important that accountability be open and transparent, which is why we publish these," she said.