OFT warns of regulation in regard to behavioural targeting

The Office of Fair Trading (OFT) says the online industry is not doing enough to address consumer concerns over behavioural targeting, despite advances in online self-regulation.

Computer user

In a market study on behavioural targeting and targeted pricing practices published today the OFT today reports more could be done to allay fears about how online data is used and people’s privacy is protected.

The OFT, which values the behavioural targeting sector at between £64m and £95m, says web users need to be made aware they are being served behavioural targeted ads, and be provided with clearer ways to opt out.

The OFT says the Consumer Protection from Unfair Trading Regulations 2008 (CPRs) may apply to online behavioural advertising, saying it could be relevant if advertising misleads consumers about “the collection of information where this would lead consumers to alter their ’transactional decision’”.

As such, it has called on the Internet Advertising Bureau to ensure the online industry is more transparent in its use of behavioural targeting practices.

However, it has warned that if self-regulation isn’t improved both the OFT and Information Commissioner’s Office could enforce increased external regulation.

Heather Clayton, OFT senior director in the Consumer Market Group says: “The OFT is keen to engage with industry players and consumer groups while behavioural advertising is in its relative infancy, and before targeted pricing takes hold, so that the market develops in a way that protects consumers from bad practice.”

“Discussions now about the potential for both benefits and harm, and how consumer protection legislation applies, will stand us in good stead in the event that industry action proves ineffective or targeted pricing becomes a reality.”

Nick Stringer, director of regulatory affairs at the IAB, says: “We welcome the OFT’s strong support and endorsement of the IAB’s work to create a self regulatory framework and best practice for behavioural advertising.

“The OFT’s discussion document is a step forward for the industry and we will work together to raise awareness of the choices that consumers have online and create consistency across the industry.

“IAB research found that any consumer concerns decrease when presented with the relevant information about behavioural advertising as well as the tools to turn it on or off. The online advertising industry has already made a serious commitment and investment to safeguard consumer privacy whilst delivering a more relevant online experience.

“As the OFT recognises, this is an evolving process and the IAB is developing Good Practice guidelines for all EU markets that will address some of the OFT’s outstanding concerns. This work involves an unprecedented level of cooperation among different stakeholders in the advertising industry. We look forward to discussing these issues with the OFT and those stakeholders at the proposed roundtable talks in June, as well as continuing our engagement as we seek to continually improve our self-regulatory work.”

This story first appeared on newmediaage.co.uk

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