Are Online Targeted Advertising Practices Violating Wiretap Laws?

Released one day before the Senate Commerce Committee held its hearing on the privacy implications of online advertising, a new report says targeted ads may involve practices that violate state and federal wiretap laws.

On Tuesday, the Center for Democracy and Technology (CDT) issued a memo, saying Internet service providers (ISPs) that allow an advertising network to copy [their] customers' Web traffic contents are defying "reasonable consumer expectations and may [be violating] communications privacy laws."

Currently, some ISPs are working with third party advertising agencies, which are copying consumer data in order to target specific ads at users. One such firm, NebuAD, testifed before the Senate Commerce Committee yesterday. NebuAd claims it does not violate any laws because they do not collect personally identifiable information. Some, though, argue that any collection of data can ultimately be tied to an individual and disagree with NebuAd's assertion that privacy is completely protected. CDT's memo says the practice most likely violates legal protections provided in the Electronic Communications Privacy Act.

"Consumers do not expect their ISP to be copying their Internet communications and selling them to third parties," said CDT Vice President Ari Schwartz. He stressed that consumers need to be aware that their information is being sold to outside groups, and there should be "clear notice and prior consent."

CDT acknowledges that federal laws may allow these practices with the consent of subscribers, but they say they fear consumers are "ill-equipped" to know how or even if their information is being tracked.

And while CDT President Leslie Harris said the larger ISPs have shied away from using firms like NebuAd, she says this model is not going away anytime soon. Harris says they want to see the Federal Trade Commission adopt enforceable guidelines and a sensible privacy regime for handling these evolving challenges to Internet privacy.