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The Federal Trade Commission’s Bureau of Competition has issued an advisory opinion letter stating that it has no present intention to challenge the Council of Better Business Bureaus’ (CBBB) proposed “accountability program,” which would hold companies engaged in online behavioral advertising accountable for compliance with the “Self-Regulatory Principles for Online Behavioral Advertising.” These principles were released in July 2009 by a coalition of industry associations, and are administered by the Digital Advertising Alliance.

According to the staff letter, the CBBB’s proposed accountability program has the potential to benefit consumers by increasing transparency of, and consumer control over, certain aspects of online behavioral advertising, and there appears to be little or no potential for competitive harm associated with the proposed program. Although companies will conform their online behavioral advertising practices to a specific standard under the CBBB program, that conformity likely will enhance consumer autonomy without limiting choice of competitively offered goods and services that consumers may desire, the letter states.

Online behavioral advertising is the practice of tracking a person’s online activities in order to deliver targeted advertising supposedly tailored to that person’s interests. The CBBB self-regulatory principles relate to transparency about the information collected and giving consumers the option to control whether and how the information is used. Unless it is designed or misused by competitors to limit competition, industry self-regulation to provide consumers with more useful information and increased choice generally benefits consumers with little or no risk of diminishing competition among complying businesses, the letter observes.

The staff advisory opinion is limited to the competition law analysis requested by the CBBB and does not address the adequacy or appropriateness of the industry self-regulatory principles or their administration. The advisory opinion can be found on the FTC’s website and as a link to this press release. (The staff contact is Michael Bloom, Bureau of Competition, 202-326-2475.)

The FTC’s Bureau of Competition works with the Bureau of Economics to investigate alleged anticompetitive business practices and, when appropriate, recommends that the Commission take law enforcement action. To inform the Bureau about particular business practices, call 202-326-3300, send an e-mail to antitrust{at}ftc{dot}gov, or write to the Office of Policy and Coordination, Room 394, Bureau of Competition, Federal Trade Commission, 600 Pennsylvania Ave, N.W., Washington, DC 20580. To learn more about the Bureau of Competition, read Competition Counts. Like the FTC on Facebook and follow us on Twitter.

(FYI 34.2011.wpd)

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