Fifteen individuals have filed suit against NebuAd—a pioneer in “behavioral targeting” online advertising—and six Internet service providers, claiming the firms violate Web users’ privacy.
NebuAd’s software tracks an ISP customer’s Web activity and then delivers ads targeted to those customers based on what sites they visit frequently.
The Redwood, California-based start-up once boasted 30 clients, mostly ISPs covering 10 percent of all U.S. Internet consumers. But NebuAd’s business plan started to fall apart last year when influential members of Congress expressed concerns about private firms tracking customers’ Web traffic.
Hurting Freedom of Internet
Some experts say the lawsuit, and negative attention firms such as NebuAd have attracted, will only make Internet use more expensive in the long run.
“It’s online advertising, including services like NebuAd, that enable today’s familiar subscription-fee-free flood of information, frictionless e-commerce, and the free soapbox enjoyed by bloggers around the world,” said Wayne Crews, vice president for policy at the Competitive Enterprise Institute in Washington, DC.
The legal action could become a class-action lawsuit, representing tens of thousands of Web users NebuAd and ISPs used to monitor. The suit claims the software violates laws already in place to protect users’ privacy.
Possibly Big Legal Impact
Some legal observers say the case could become a landmark one determining how the courts interpret federal and state Internet privacy laws. Crews thinks government should tread carefully before moving to solve a problem that doesn’t exist.
“Note how we’ve worked ourselves into a lather,” Crews said. “Policymakers were concerned about privacy when ads were untargeted and irrelevant—in the form of spam. Now a solution to spam has come along—behavioral and contextual marketing that makes ads relevant—and we’re hand-wringing about privacy.
“Policy should recognize privacy is not a single ‘thing’ for government to protect,” Crews said. “It is a relationship expressed in countless ways. That relationship is best facilitated by emergent standards and contracts” in the private sector.
Aleks Karnick ([email protected] ) writes from Indianapolis, Indiana.