On October 9, 2012, the Digital Advertising Alliance (“DAA”), issued a significant statement concerning the new Do-Not-Track (“DNT”) default setting that will be part of Microsoft’s newest Internet Explorer – version 10 (“IE 10”), the default browser for the Windows 8 operating system. The DAA’s statement signals an impasse in the negotiations with Microsoft over the DNT setting, by making clear that the DAA will not penalize members for ignoring DNT settings on IE 10 when it is launched later this month. This stance would deal a significant blow to the effectiveness of IE 10’s DNT setting, and reveals that the debate over DNT is far from over.
Microsoft and the DAA have been sparring for months since Microsoft announced last May that IE 10 would include by default a setting that would prevent users’ web surfing activities from being tracked for purposes of delivering targeted advertising. Microsoft believes “that consumers should have more control over how information about their online behavior is tracked, shared and used.” Accordingly, IE 10 users who want to be tracked and receive personalized advertising will have to explicitly change the default setting on their web browser.
On the other hand, the DAA, a consortium of leading online advertising and marketing trade groups, believes that its implementation of a number of self-regulatory solutions protects consumer privacy, while permitting the delivery of targeted advertising in web browsers. These solutions include the self-regulatory principles that DAA members agree to follow, the use of an advertising option icon, a means of providing enhanced notice to consumers of online behavioral advertising practices, and the ability of consumers to opt-out from online behavioral advertising using tools provided by the DAA. The IE 10 DNT setting thus conflicts with the DAA’s self-regulatory solutions, which allow users to affirmatively chose to not receive targeted ads by visiting the Opt-Out From Online Behavioral Advertising page.
Indeed, since Microsoft announced its IE 10 default DNT setting, the DAA has not been shy in expressing its disappointment and attempting to apply pressure on Microsoft to retreat from its plans. Last May, the Wall Street Journal reported that the DAA and the federal government had agreed that the online advertising industry would honor DNT requests as long as browser manufacturers did not make it a default setting. Moreover, the DAA claims that for several years, it has worked with both Microsoft and various arms of the federal government, including the White House, Department of Commerce, and the Federal Trade Commission (FTC) on proposals to ensure consumer privacy, while still permitting tracking consistent with an opt-out regime.
Any efforts between Microsoft and the DAA to work collaboratively, however, appear to have stalled. In its most recent statement, the DAA upped the ante by making it clear that the Council of Better Business Bureaus and the Direct Marketing Association will not penalize DAA members if they ignore the IE 10 DNT setting. “Allowing browser manufacturers to determine the kinds of information users receive could negatively impact the vast consumer benefits and Internet experiences delivered by DAA participants and millions of other Web sites that consumers value,” the DAA said. The DAA added that “it is not a DAA Principle or in any way a requirement under the DAA Program to honor a DNT signal that is automatically set in IE10 or any other browser.”
Certain legislators, including Representatives Joe Barton (R-Texas) and Edward Markey (D-Mass.), who both sit on the House Energy and Commerce Committee and serve as co-chairmen of the bipartisan House Privacy Caucus, are supporting Microsoft. Barton and Markey issued strong statements against the DAA:
Privacy is an issue that affects everyone, and the Digital Advertising Alliance’s announcement made clear that it puts profits over privacy. If consumers want to be tracked online, they should have to opt-in to be tracked, instead of the other way around. This is why we are disappointed to hear the Digital Advertising Alliance insist that it will not honor Microsoft’s “Do Not Track” default and will not penalize companies that ignore it.
While we appreciate the efforts industry has taken to develop a ‘Do Not Track’ signal, we have long endorsed a standard that allows consumers to affirmatively choose whether to permit collection of their personal information and targeting of advertisements. Until we have stronger privacy laws in place that mandate a company adhere to a consumer’s preference, especially for children and teens, consumers and their personal information will remain at risk.
These conflicting positions after months of discussion and debate demonstrate how complicated and contentious DNT has become, notwithstanding the significant steps that the DAA has made with its self regulatory principles and the advertising option icon, as well as various advances in web browser technologies, including those in IE 10, which will provide consumers with more tools to restrict tracking. Further, FTC Chairman, Jon Leibowitz, is pushing all of the players to reach an agreement on DNT standards by the end of the year and has suggested that the FTC may take its own DNT actions if industry is unable to agree on appropriate standards. Significantly, if an agreement is not reached, it is possible that the FTC could investigate or take action against DAA members that do not honor IE 10 DNT settings for engaging in allegedly unfair or deceptive trade practices. Alternatively, congressional leaders could apply their own pressure on the DAA, its members, and/or Microsoft with requests for information about how the parties intend to address consumer choice and privacy in light of these disputes.
While an agreement involving the advertising industry, browser manufacturers and relevant federal regulators seems ideal, these latest developments suggest that a deal by year-end will be challenging and probably unlikely. Thus, the IE 10 DNT battle is likely to continue in the near term with the release of Windows 8 (and IE 10) later this month, and into the future particularly if the relevant players continue to dig in their respective heels.
