NAI Announces Release of Draft Revised Data Collection Code of Conduct

Earlier this week, the Network Advertising Initiative announced the release of a draft revised code of conduct for public comment that would require those delivering targeted advertising to provide notice regarding data collection and use practices “in and around the targeted ads they serve.” The NAI is the leading self-regulatory body governing “third parties” in the online advertising space. Its members covenant to comply with and be guided by the NAI behavioral advertising principles.

There have been significant changes in the regulatory and self-regulatory landscape surrounding online advertising since the NAI last updated its Code of Conduct in late 2008. Shortly after the NAI released its 2008 Code of Conduct, the FTC released a Staff Report setting forth a set of Self‐Regulatory Principles for Online Behavioral Advertising. Those principles are substantially similar to the NAI Code, and the NAI has informally adopted those principles through its compliance program.

The draft code would require members to provide, or support the provision of, notice of data collection and use practices, as well as the choices available to consumers, in or around advertisements.

In addition to the “enhanced notice” requirement, the revised code would replace the term “Online Behavioral Advertising” with “Interest-Based Advertising” and require companies to disclose the technologies they use for Interest-Based advertising and ad delivery and reporting.  This provision is intended to bring an additional level of transparency to all technologies members use for those purposes. It would also preclude companies from using data for certain eligibility decisions, such as, employment eligibility, credit eligibility, health care eligibility and insurance eligibility.

The draft code also provides that the level of choice that members provide be commensurate with the sensitivity and intended use of the data. Specifically, use of non-personally identifying information for “Interest-Based Advertising” shall require provision of an opt-out mechanism, which shall be available both on the NAI website and on the member’s website.  It also provides that the use of precise geo-location data shall require a consumer’s opt‐in consent.

A revised “sensitive data” definition includes a new category, sexual orientation. “Under this revision, companies would be prohibited from collecting or storing information about a user’s sexual behavior or orientation for Interest-Based Advertising or ad delivery and reporting without obtaining opt-in consent,” the NAI has stated.

The revised code also clarifies what it means to “honor” a user’s opt-out choice. When a user has opted out of Interest-Based Advertising, member companies must honor the user’s choice as to the particular browser or device. Companies may continue to collect data for “internal operations” practices even after a user has opted out.

The NAI also plans to develop guidelines on the collection and use of data on mobile devices.

Information conveyed in this article is provided for informational purposes only and does not constitute, nor should it be relied upon as legal advice. No person should act or rely on any information in this article without seeking the advice of an attorney.