The Legality and Ethics of Internet Advertising
ABSTRACT: Recently, DoubleClick.com, one of the world’s premier Internet advertising firms was at the center of a Federal Trade Commission investigation on privacy. Consumer privacy advocates have charged the company with infringing on the privacy of websurfers because of the aggressive means it uses to gather data for profit. This paper discusses the legal and moral issues surrounding these tactics. Were the company’s aggressive tactics legally permissible? Were they ethical? Companies such as DoubleClick need to inform the websurfer that he/she is being monitored.
The world of the Internet uses advertising as its central driving force. Internet start-up companies have spent millions upon millions of dollars on advertising, making Internet advertising a very lucrative business. In fact, right now the advertising market is estimated to be worth about $6.6 billion and is expected to be worth $27 billion by 2004.1 One of the leaders in the business, DoubleClick.com, has a significant market share of the industry with over 1,500 client sites. The aggressive means by which DoubleClick operates has made it the advertiser of choice by many Internet companies.
The power of DoubleClick is in its usage of Internet "cookies" to gather information on web surfers. Every time you visit a website that is powered by DoubleClick, an Internet cookie is placed on to your web browser. The cookie helps DoubleClick track what your Internet habits are and which websites you visit most often. This information is then kept in a database that is later used by DoubleClick to target consumers with ads based on the information that it has on different user types. It is estimated that DoubleClick has 100 terabytes of surfing information. This means it has about 300 pages of information per Internet user. If you give your name and address to a website that is a client of DoubleClick, then DoubleClick could link your previously anonymous web browsing to you personally. To gain even more access to information about consumers, DoubleClick recently acquired Abacus Direct2. Abacus Direct is the holder of the US's largest direct mail data list, it has information on an estimated 88 million American households. It has consumers' names, addresses, and phone numbers, along with information on their shopping and financial habits. Early in the year 2000, DoubleClick began merging the two databases. When this happened different consumer and privacy advocacy groups sounded an alarm3. They had always been opposed to DoubleClick's practices, but DoubleClick's last step was too much.
Different lawsuits were brought to the courts alleging violations of consumer's privacy4. On February 17 of last year, the Federal Trade Commission began doing an inquiry into the business practices of DoubleClick. At around the same time, the Michigan state attorney charged the company with violating the...