Trial Date Set in DoubleClick Case

Alley-based DoubleClick likely will be heading to court in January, over alleged abuses of its “cookie” policies.

On Wednesday, lawyers for California resident Hariett Judnick received word from state Judge Lynn O’Malley Taylor approving a January 2002 trial date — despite DoubleClick’s earlier efforts to have the case thrown out.

Earlier this month, Taylor okayed most of Judnick’s claim rather than agreeing with DoubleClick’s arguments for having the case dismissed, effectively affirming that there is merit to the suit, which asks for a permanent injunction against the Web ad firm. (Earlier, DoubleClick prevailed on Federal judges to throw out a similar lawsuit in New York in March.)

As a result — and barring an out-of-court settlement — the New York-based ad network will proceed to trial for what California Judnick and her attorneys allege is “unfair, deceptive and unlawful business practices” and “false and misleading advertising,” stemming from DoubleClick’s privacy policies.

Specifically, Judnick posits that DoubleClick’s cookie practices amount to the illegal tracking of Web surfers’ information — both non-personally identifiable and confidential data — because, the suit argues, this monitoring is occurring without users’ knowledge and permission.

“We believe the California constitution’s right to privacy stands for the proposition that companies like DoubleClick have to ask permission before they track, store and analyze what families look at and click on, on the Internet,” Ira Rothken, Judnik’s San Rafael, Calif.-based attorney said. “So it basically means that we believe the lawful model would be opt-in, not opt-out.”

“In order to be able to waive the constitutional right [to privacy], you’ve got to do in a knowing way, and the only way is to ask … first,” he added. “DoubleClick’s not doing that.”

But DoubleClick, which referred questions about its privacy policies to the notices posted on its Web site, routinely says it collects online information only from partners with clearly posted privacy policies of their own. In its own policy, DoubleClick also maintains that it has “taken steps to ensure that the marketing scores associated with unique cookies do not contain any sensitive information.”

Nevertheless, the suit charges DoubleClick executives with essentially having compromised the company’s own privacy policy, having “misled the general public into a false sense of privacy and security regarding their Internet use, while deceptively acquiring, storing and selling millions of Internet users’ most private and personal information for profit.”

Judnick’s suit also alleges that DoubleClick and its executives “fail and have failed to provide adequate safeguards for ‘inadvertent’ disclosure of private information (or a mistaken mouse click) and provide no means for members of the General Public to destroy all such data collected … after such inadvertent disclosure is made.”

That charge stands out especially in light of DoubleClick’s trouble with hackers in recent months. After at least one unauthorized entry into a DoubleClick Web server in March, the company said that its databases were secure and that none of its cookie information had been leaked.

At any rate, the stakes are high for DoubleClick and other online ad networks and publishers that rely on opt-out cookie practices to track users and target advertising. In the event that the California court forces DoubleClick to submit to an opt-in policy, it’s likely to affect the efficacy of products like DART, in which post-click tracking, reporting and retargeting plays a major role. It likely will also affect similar products from rivals like 24/7 Media, Engage, L90, Avenue A and others.

That’s in addition to creating a difference of opinion with the Federal Trade Commission, which in 2000 agreed to recommend an opt-out policy, as pushed by the trade group Network Advertising Initiative (of which DoubleClick is a member.)

But to Rothken, who’s been practicing law for a decade, that’s a small concern compared to what he describes as the benefits of such a ruling — which would serve to strengthen the industry, rather than hurt it, he believes.

“I don’t think much will happen to the online ad industry, except that will become compliant with law,” he added. “I frankly think that not only is the opt-in model better from a privacy standpoint, but it’s better from an advertising standpoint. You have people who have shown an interest to opt-in, so rather than just preying off people who have no idea what’s happening to them, opt-in gives advertisers a very hot property.”