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July 09, 2008
BT braces for firestorm

A Senate Commerce Committee hearing today is likely to put behavioral targeting squarely in the spotlight as lawmakers look to understand how the growing online advertising business impacts the privacy of users.

At the heart of the hearing will be a showdown between Leslie Harris, the CEO of The Center for Democracy and Technology, who issued a scathing report on behavioral targeting that suggested that some industry practices already violate federal law.

Opposing Harris is NebuAd, one of the more aggressive BT providers, which is currently working with internet service providers to better track users' online behavior. Earlier this week, NebuAd backed off some of its plans and announced some enhanced privacy safeguards, including better disclosure and the ability to more easily opt out.

Privacy has long been a thorny issue for online advertising because the industry insists that anonymous data collection is both less invasive and more likely to lead to relevant ads, which will in turn enhance the user experience. But those points haven't been well received by privacy advocates.

"Advertising per se is not the evil here," Harris said in a conference call with reporters Tuesday. "It's the collection of individuals’ information, usually without their knowledge, always without their consent, creation of profiles and the complete inability of people to make choices about that."

Today's hearing could be the beginning of increased scrutiny of online advertising coming from Washington. Though unrelated, federal regulators have said that they will launch a formal investigation in Google's proposed search deal with Yahoo. While that inquiry will specifically look to the alleged anticompetitive implications of such a pairing, privacy is also likely to rear its head given the massive amounts of search data the deal will give Google access to.