DoubleClick Settles with States On Profiling

DoubleClick has settled with state attorneys over its use of cookies to track and target online consumers, effectively concluding one of the last challenges to its privacy policies.

The settlement will see the New York-based Web ad server paying $450,000 to the 10 states that had been investigating DoubleClick since 2000, checking to see whether the company violated stated privacy policies in the process of tracking online consumers and targeting ads using cookies . The payment covers legal costs and consumer education.

Under the settlement, DoubleClick said it would make its online tracking activities more transparent by giving consumers access to their online profiles through a “cookie viewer” that it’s developing. DoubleClick also said it would work with its publishing clients to ensure their privacy policies adequately inform consumers that the company’s technology profiles visitors.

DoubleClick also agreed to not use consumer data gleaned from clients to build its own profiles, and agreed to not merge data from multiple clients’ visitors. Consumers also will be able to register for updates on the company’s privacy policy.

The company also is tasked with providing independent verification of its compliance with the agreement. The company will pay for three independent reviews during the next four years, to confirm that DoubleClick is following its own privacy policy, and abiding with its agreement with the states. Consumers will be able to see the results posted on DoubleClick’s site.

“It’s hard for consumers to trust e-commerce when they can’t see the practices behind the promises,” said Eliot Spitzer, Attorney General of New York State, which led the states’ inquest. “Consumers need reliable privacy verification either first-hand, or through an independent and publicized review. DoubleClick is to be commended for its cooperation in setting an industry standard for promoting consumer privacy in the data collection and tracking taking place across networked websites.”

The states’ investigation came about after DoubleClick’s acquisition of Abacus Direct in 1999, and the firm’s announced plans to link its new offline, personally identifiable consumer profiles to online tracking data. In the wake of the announcement, consumers filed lawsuits — ultimately combined into a class action — and the Federal Trade Commission began looking into DoubleClick’s privacy practices.

DoubleClick abandoned the plan soon afterward, and the FTC closed its investigation. In December, the company also shuttered its ailing network profiling business, which had been at the heart of the controversy. Five months later, DoubleClick concluded a class action by agreeing to adopt privacy disclosure standards and by paying $1.8 million in attorney fees.

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