OFT to lay down the law on behavioural ads

 

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By Stewart Mitchell

Posted on 26 May 2010 at 08:37

The Office of Fair Trading has drawn up plans outlining how regulators could take legal action if behavioural advertisers fail to comply with industry guidelines for self regulation.

The OFT’s report into targeted advertising and prices stopped short of laying down specific rules on targeted adverts, calling instead for tighter industry regulation, but said it was drawing up a framework to enable future enforcement.

“We are encouraging self regulation that will give consumers more protection and make it easier to opt out,” an OFT spokesperson told PC Pro. “But as a back stop we are drawing up a Memorandum of Understanding with the Information Commissioner's Office (ICO) to see in what circumstances each body would take enforcement action.

“We’ve looked at how existing regulations might apply, and which regulation might apply under laws enforced by the ICO, such as data protection, and which consumer protection regulations might apply and which we would enforce,” the OFT said.

According to the report, under laws enforced by the Information Commissioner's Office, it is a legal requirement for firms to clearly inform consumers about the purposes of storing tracking cookies on their computer and to provide an opportunity to opt out.

The OFT also believes the Consumer Protection from Unfair Trading Regulations 2008 could apply to behavioural advertisers if they mislead consumers about the collection of information where this would lead consumers to alter their "transactional decision". This would include, the OFT says, a decision on whether or not to visit a website.

To stave off the possibility of legal action, the OFT has called on the industry body, the Internet Advertising Bureau, to insist its members improve information about opting out.

"The OFT is keen to engage with industry players and consumer groups while behavioural advertising is in its relative infancy so that the market develops in a way that protects consumers from bad practice," OFT director Heather Clayton said in a statement.

"Discussions now about how consumer protection legislation applies will stand us in good stead in the event that industry action proves ineffective."