Privacy Bill In the Works to Require Opt-In for Cookies

Members of congress are preparing legislation that could severely impact how advertisers and others gather information and present material on the Web and through other digital means. The legislation would restrict the ability to place third party cookies* on the computers of those visiting Web sites, according to industry veteran Dave Morgan, speaking at the Advertising Research Foundation's Audience Measurement 4.0 conference today.

"Congress’ position is that consumers are not appropriately aware of what is being done on their machines, and the use of cookies delivered by a third party is something consumers have not been appropriately informed of," said Morgan, who oversees privacy initiatives for the Internet Advertising Bureau and is CEO of the startup Simulmedia. He was in Washington last week talking to FTC officials and congressional staff, he said. "Congress’ default position is that that will require an opt-in," to serve a third-party cookie. Rep Rick Boucher, who is working on the bill said he could get it through the House, that it would be passed, and that he was willing to work with the industry and consider self-policing measures, Morgan said.

But, Morgan said, the industry has to move fast, and legislators are skeptical of the industry's ability to police itself. There have, he was told, been many abuses. He said he'd had a conversation with a senator from the state of Washington who had worked in the industry who understood that cookies are relatively innocuous but "her constituents don't believe that." Washington senator Maria Cantwell worked at RealNetworks for a time after losing a congressional seat in 1994 and prior to joining the Senate.

Morgan said the tactic the industry could best use at this point was to approach legislators and inform them of the jobs created by the industry, $300 billion worth, according to a Harvard study he cited. Morgan previously led advertising company 24/7 Real Media and behavioral ad targeting firm Tacoda, sold to AOL for some $250 million. The technologies of the companies relied heavily on cookies. Morgan has often been called upon to answer concerns about user privacy.

NOTE: I videotaped Morgan after the panel and will run it during the next Naked Media (noon ET, June 30). along with Morgan defending and Nielsen Online's CEO calling him to task for saying Twitter can be used a measurement tool that could compete with Nielsen. The video will later be available on demand at NakedMedia.org.

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*Cookies, pieces of code, are key to understanding Web users' behavior through everything from ad serving to the number of pages seen and paths taken through a Web site. Third-party cookies are those placed on a users' machine by someone other than the Web site the user is visiting, for example via an advertiser or partner. Currently, such cookies are served automatically and data collected that way as well, unless the user chooses settings in a Web browser that block them, or chooses to actively delete them.