In what some may feel is an overdue development, the Committee of Advertising Practice (CAP) has announced that it is introducing new rules on online behavioural advertising (OBA) from 4 February 2013. In summary, the UK Code on non-broadcast Advertising, Sales Promotions and Direct Marketing (CAP Code) will be amended to require advertisers:
· to tell web-users about the use of OBA in or around the advertisement delivered by OBA; and
· to provide users with a mechanism to opt out of their web browsing behaviour being collected and used for OBA.
As well as amending the CAP Code, CAP has issued a helpnote on OBA to help advertisers understand the new rules.
Background
OBA behavioural advertising allows brands to target advertisements at web users which reflect the user’s interests, based on their Internet browsing activity. It groups users with other users into interest groups or segments and serves them advertisements based upon these interests. Although the practice is anonymous, some consumers find it quite disconcerting, especially if they do not really understand what is happening and they worry about their privacy.
In a regulatory statement, CAP states that it is responding to research that has found that if consumers understand OBA and are given a choice about its use, many of them choose to receive targeted advertising. In addition, CAP has taken account of the European Advertising Standards Alliance Best Practice Recommendation, which provides for a pan-European, industry-wide self-regulatory standard for OBA. It incorporates and complements Interactive Advertising Bureau Europe’s self-regulatory framework for OBA. Consequently, similar rules will be incorporated into advertising codes across Europe.
Further, CAP considers that extending the ASA’s remit to cover OBA will enhance protection and enforcement of the rules. As a result, CAP considers that it is proportionate and necessary to introduce the new rules, which will be contained in a new Appendix 3 to the CAP Code.
The new rules
Appendix 3 will provide that, to ensure that consumers are made aware of, and can exercise choice over, the collection and use of information for the purposes of OBA, ‘third parties’ must:
· give a clear and comprehensive notice about collecting and using web-viewing behaviour data for OBA on their own web site, including how a web user can opt out from having web viewing behaviour data collected and used for OBA – the notice should also link to a relevant mechanism that allows the consumer to opt out of the collection and use of web viewing behaviour data for OBA by that third party and other third parties;
· give a clear and comprehensive notice that they are collecting and using web-viewing behaviour data for OBA, either in or around the display advertisement delivered using OBA – the notice should link to a relevant mechanism whereby a web user can opt out of the collection and use of web-viewing behaviour data for OBA by that third party or that third party and other third parties;
· not create interest segments specifically designed to target OBA to children aged 12 or under.
Third parties using technology to collect and use information about all or substantially all web sites that are visited by web users on a particular computer to deliver OBA to that computer must obtain explicit consent from web users before doing so.
What are ‘third parties’?
The rules refer to ‘third parties’. These are organisations which carry out OBA (ie collect and use web viewing behaviour data for OBA) via web sites other than those that they or an entity with which they are under common control own or operate.
If the ASA is unable to identify the relevant third party, the advertiser on behalf of whom the OBA advertisement is delivered to web users must, in good faith, co-operate with the ASA to help discover the identity of the third party.
Exclusions from scope
There are certain exclusions from the scope of the new rules. They do not apply to: contextual advertising; web analytics; ad reporting or ad delivery; the collection and use of information for behavioural advertising by web site operators on their own web site(s) or the use of OBA in rich media or in-stream videos online.
The rules also exclude mobile devices, but CAP says in its helpnote that it plans to amend the rules in due course to cover mobiles.
How to comply with the new rules
CAP understands ‘notice’ to mean the placement of an icon, symbol, text or similar (in or around display advertisements delivered using OBA) which is easily discernible to the normally sighted web user, for example of a size and colour that makes the notice easy to see. The notice should not be obscured by background text on either the web site or the display advertisement.
Organisations could also provide a link in their privacy statements to the web site: http://www.youronlinechoices.com/uk/, which explains what OBA is. However, this will not be sufficient on its own, and as noted above web sites must provide clearly visible information about OBA.
CAP and the ASA will review how the new rules are operating after a year.
Helen Hart is a freelance legal journalist and editor. She has previously worked at Practical Law Company, Stevens & Bolton LLP, Palm, Centrica and Allen & Overy LLP.
