Avenue A Fires Back at Class Action Suit

Executives from online ad firm Avenue A expect to mount a vigorous defense to a class-action lawsuit alleging privacy violations, filed against the firm last week in Washington state.

The suit alleges that Seattle-based Avenue A, which handles online media planning, ad serving, targeting and reporting, illegally tracks Internet users and gleans unauthorized information.

The suit, filed in U.S. District Court in Seattle Nov. 20, alleges that Avenue A “covertly, without consent, and in an unauthorized manner, implanted Internet ‘cookies’ upon Internet users’ computer hard disk drives … Avenue A has used those cookies and other surreptitious data-collection methods to secretly intercept and access computer users’ personal data and Web browsing habits and has transmitted this data to Avenue A for its own commercial benefit.”

According to the suit, Avenue A “wrongfully” obtained users’ full names, home addresses, telephone numbers, email addresses, online behavior, purchase history and demographic data, without alerting Internet users.

Avenue A on Tuesday released a statement that it will contest the lawsuit and said that much of the complaint is flawed — and hence, invalid. The company did not specify points in the suit to which it objected.

“We believe that the lawsuit is without merit and includes a number of erroneous assertions about how Avenue A operates and how the World Wide Web in general operates,” said Avenue A chief executive officer Brian McAndrews. “We are fully prepared to defend both our business practices and our reputation.”

“Avenue A has strived to be the most progressive company in our industry in creating and complying with legal principles relating to Internet user privacy,” McAndrews said. “We, along with the Network Advertising Initiative, have taken a leadership role in formulating self-regulatory principles that have been endorsed by the FTC. We adhere to these principles.”

Supporting Avenue A’s case is that membership in NAI, the guidelines of which have been approved by the Federal Trade Commission and are now awaiting Congressional action. One tenet of the NAI guidelines is that a Web site privacy policy — like that which Avenue A has posted on its site — is fair disclosure that users are being anonymously tracked.

In its policy, Avenue A does say that it tracks a limited amount of Internet users’ online activities anonymously. The company said it collects and stores information including users’ unique cookie numbers, specific ads users have seen, the time and place where a user saw an ad, and users’ Internet Protocol address, as well as information about how many times users view and click on clients’ ads and whether or not a user visits specific pages of a client advertiser’s Web site.

With regard to transactional histories, Avenue A said that occasionally clients will send it anonymous information they collected online during transactions. The company said information added to users’ profiles from this practice relates to online transactions, such as the Web site user’s ZIP code, the transaction, and which products were purchased.

Avenue A also said it can collect data from non-transactional events that occur on a client’s Web site — such as if the user applies for a loan. In these instances, Avenue A said it does not know of the content or amount of the events, but simply that the event — a loan application — occurred.

Avenue A said in its policy that it does not collect names, email and home addresses, or phone numbers from Internet users.

The company also provides instructions on its site of how to opt-out of the anonymous profiling practice. Opting out is the standard approved by the NAI.

The question is whether the court will determine if Avenue A’s Web site disclosure of these practices gives users fair notice about its cookie actions, and also whether Avenue A’s actions — both those the company discloses, and any others that the court finds the company undertakes — warrant penalties under two federal statutes, the Electronic Communications Privacy Act and the Computer Fraud and Abuse Act, and other state statutory and common law claims.

At stake for the ad serving and targeting industry at large is whether the court’s decision will affect the de facto industry standards of opting out of anonymous profiling, and Web site privacy notices.

Several online ad firms are facing similar suits. The attorneys representing Internet users in the case against Avenue A last week also filed a suit against a competitor, MatchLogic. Industry giant DoubleClick, too, is fighting several comparable suits.

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