FTC Settles With Chitika Over Online Ad Tracking

Online ad company settles with FTC

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The Federal Trade Commission said today it has reached a settlement with online advertising company Chitika, that ends the company’s allegedly deceptive practice of tracking peoples’ activities even after they opted out of online tracking on Chitika’s website.

The FTC alleged that in its privacy policy the company says that it collects data about consumers’ preferences, but allows people to opt out of having cookies placed on their browsers and receiving targeted ads. The privacy policy includes an “Opt-Out” button. Consumers who click on it activate a message that states, “You are currently opted out.”

According to the FTC complaint, from at least May 2008 through February 2010, Chitika’s opt-out lasted only 10 days. After that time, Chitika placed tracking cookies on browsers of consumers who had opted out and targeted ads to them again. The FTC charged Chitika’s claims about its opt-out mechanism were deceptive and violated federal law.

The settlement blocks Chitika from making deceptive statements about about consumers and the extent to which consumers can control the collection, use or sharing of their data. Every targeted ad must include a hyperlink that takes users’ to an opt-out options that allows them to opt out for at least five years.

It also requires that Chitika destroy all identifiable user information collected when the defective opt out was in place. In addition, the settlement requires that Chitika alert people who previously tried to opt out that their attempt was not effective, and they should opt out again to avoid targeted ads.

FTC Settles With Chitika Over Online Ad Tracking
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  • http://chitika.com Daniel Ruby

    We at Chitika have a full press release out regarding this settlement. It can be read at http://www.prnewswire.com/news-releases/chitika-ftc-settlement-the-facts-117950664.html

    User privacy has always been of the utmost importance to us, and we do not collect and never have collected any personally identifiable information (PII). We appreciate the FTC’s mission to safeguard Internet privacy and always want to be on the forward edge of protecting the user. Since March of 2010, our opt-out process removes users from any behavioral tracking for ten years.

    Our ad network has no use for PII – our CEO is quoted in the release as saying that we don’t care who you are, just what you want. We feel that as an ad network, we can deliver an excellent user experience along with great results for advertisers and publishers without having to create personally identifiable user profiles.

    Daniel Ruby
    Director of Research and Marketing

  • http://www.chitika.com Venkat Kolluri

    Chitika FTC Settlement: The Facts

    WESTBOROUGH, Mass., March 14, 2011 /PRNewswire/ — This morning Chitika, Inc. reached a settlement with the FTC regarding online ad targeting. Chitika places the utmost importance on the privacy of online users. The company believes the agreement will help it continue to place a premium on privacy as its advertising network continues to expand.

    * Chitika does not collect and has never collected any personally identifiable information (PII) for ad targeting purposes.
    * Since March 1, 2010, Chitika’s option to opt out of any behavioral targeting is a 10-year opt-out.
    * Prior to March 1, 2010, an error in Chitika’s opt-out process mistakenly set opt outs to expire in 10 days rather than the intended 10 years.
    * The FTC brought this bug to Chitika’s attention in February, 2010; on March 1, the company had fixed it to opt out users for ten years.
    * May 2008 through February 2010, the period during which our opt-out process was affected by this bug, Chitika received an average of 30 opt-out requests per month across our international network compared to over 450 million monthly unique users.

    Chitika believes very strongly in Internet users’ privacy. Its advertising network is built on the idea that you can protect privacy by never collecting PII and actually have a better, more efficient ad product.

    “Personally identifiable information is of no interest to me whatsoever,” says Chitika CEO and founder Venkat Kolluri. “Our advertisements only worry about what you want, not who you are.”

    Chitika’s targeting consists of data such as browser, search engine, and search keywords, all of which allow the company to provide the most appropriate possible advertisements without collecting any data which could be used to identify an individual user. The company continues to believe that non-PII data is a targeting method that is best for not only users, but also advertisers and publishers.

    For more information on Chitika’s privacy profile, please visit http://chitika.com/privacy_policy.php

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