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US online advertisers scramble to avoid new privacy legislation

The US advertising industry has drawn up guidelines for online advertising in an attempt to avoid legislative action over controversial behavioural targeting practices.

Privacy groups have condemned advertisers for using technologies such as Phorm which track online users' browsing habits and then use the information for targeted marketing campaigns.

This form of advertising has raised privacy concerns because it leads to the creation of large databases of personal information.

The guidelines are in response to a warning from the Federal Trade Commission (FTC) that it would step in if the industry did not control how online advertisers collect and use personal data.

The guidelines call for internet companies to inform users how their data is being collected and give them the chance to opt out.

They also call for internet service providers to get specific consent from users to track their browsing habits before doing so.

But US privacy advocates have given only lukewarm support to the self-regulation move and said consumers would be better protected by a broader privacy law, according to the Financial Times.

The FTC said the move was "a good first step", which means the advertising industry may have to take further steps to safeguard privacy to avoid new legislation on privacy in advertising.

In the UK, opponents of the Phorm technology maintain that it is illegal under the Regulation of Investigatory Powers Act.

Opposition from privacy groups has delayed a full UK implementation of the Phorm technology.

Only a limited trial with 10,000 BT customers has been conducted in the UK. Virgin Media and Carphone Warehouse have also signed deals with Phorm, but no trials have been announced.

Privacy campaigners have sent an open letter to leading web companies demanding they resist the introduction of the Phorm tracking system by BT, Virgin and TalkTalk.

The future of behavioural targeting technologies such as Phorm's is uncertain in Europe, where officials could rule that consumer profiling by advertisers breaches privacy laws.


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