The Big News: DoubleClick's double gaffe
by Ryan Monceaux, Editor In Chief
The Federal Trade Commission announced last week that DoubleClick Inc., a leading Online Advertising firm, is being investigated because of its ad serving and data collecting practices. DoubleClick, while denying that any wrong-doing has taken place, has seen its stock price fall over 17 points in less than a week, an indication from investors that a problem may be uncovered.
Within days of the FTC's filing, the New York attorney general and the Michigan attorney general both announced that they have each initialized legal proceedings against the firm. Michigan Attorney General Jennifer Granholm said that Michigan's Consumer Protection Act was violated as the company tracked computer users without their knowledge or consent. In a statement, Granholm accused the company of operating a "secret cyber wiretap." Granholm said that DoubleClick has compiled 100 million consumer profiles illegally but did not say how many of those were in Michigan.
The company was quick to respond to the charges, issuing two press releases and stopping trading on its stock, all in an effort to assure its customers and stockholders that the company was taking the inquiry seriously.
In a statement released on Wednesday, Chairman and CEO of DoubleClick, Kevin O'Connor, said that the company is "fully cooperating and we applaud the FTC's efforts to keep the Internet safe for consumers." O'Connor also said that the company will cooperate with the AGs from Michigan, New York and any other state that launches a formal inquiry.
O'Connor went even further to say that his company is a leader in privacy concerns. In another move aimed at proving its dedication to privacy, DoubleClick announced the creation of a Privacy Advisory Board and said they are adding a new executive level position called Chief Privacy Officer. The company acknowledged that it is theart at least six class-action lawsuits all directed at privacy concerns.
"We are confident that our business policies are consistent with our privacy statement and beneficial to consumers and advertisers. The FTC has begun a series of inquiries into some of the most well-known web companies, including DoubleClick, and we support their efforts to keep the Internet safe for consumers," O'Connor said.
DoubleClick's opponents have maintained that the company profiles users with cookies through several of their promotions. Others have said that the measures DoubleClick has taken recently are simply to relieve pressures from critics. DoubleClick declined to disclose any information on consumers that it may have on file.
The Electronic Privacy Information Center has filed a complaint alleging that DoubleClick is unlawfully tracking the online activites of Internet users and combining surfing records with detailed personal profiles contained in a national marketing database.
"Today'complaint raises fundamental issues involving electronic commerce," David Sobel, EPIC's general counsel, said. "Much of the information collection that occurs on the Internet is invisible to the consumer, which raises seious questions of fairness and informed consent."
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