IAB Gets Tough to Play Nice with FTC

The Interactive Advertising Bureau wants to play nice with the Federal Trade Commission. As the online ad industry braces for impending online privacy legislation, the trade association made a key move recently to help the FTC crack down on rogue companies. During the group’s annual leadership summit in February, its board of directors and general membership body voted to establish a code of conduct intended to help the government enforce the IAB’s privacy guidelines.

Once the IAB establishes the code, its members will be obligated to abide by it. If a company is accused of skirting the rules, the FTC can bring a deceptive practices case against that firm. The goal, explained Mike Zaneis, IAB’s VP of public policy, is “to create a federal law enforcement hook.”

According to Zaneis, there were no objections raised by board members, who approved the measure unanimously, or by general members attending the conference, who participated in a voice vote. Self-Regulatory Principles for Online Behavioral Advertising put forth last July by a broader industry coalition will provide a basis for the code, which will be written in the next few months, Zaneis said.

The move has flown largely under the radar. Though it may seem a mere procedural change, establishment of a conduct code will provide the organization an enforcement mechanism – one some argue is needed in order to ward off regulatory pressure.

“The key is that we know for the principles to be successful, it has to be a partnership with the Federal Trade Commission,” said Zaneis. “It’s not necessarily out of the ordinary… It’s a major commitment.” The FTC mainly has been supportive of the industry’s efforts to self-regulate.

Rather than create its own monitoring program, the Better Business Bureau will help the IAB patrol its members’ practices, said Zaneis. The IAB partners with the Better Business Bureau’s advertising review body, which is overseeing a broad industry initiative that also involves the Association of National Advertisers to self-regulate through consumer education and disclosure.

Yet, as the IAB and the broader industry coalition takes steps towards enforceable self-regulation, new privacy laws are looming that could have serious effects on online advertising. New privacy legislation is expected in the next few weeks, according to Zaneis, who told ClickZ earlier this week, “We absolutely expect to see a draft bill from Congressman [Rick] Boucher in the next several weeks. They seem to have language and are working through the last few substantive and procedural issues before sharing it more widely,” Boucher, a Virginia Democrat, chairs the House Subcommittee on Communications, Technology and the Internet, a key body dealing with online ad related issues and online privacy.

According to Zaneis, the IAB’s board will draft the code of conduct over the next few months, and vote on final approval once it is written. “It’s likely to be an evolving document,” he said.