[Federal Register Volume 76, Number 54 (Monday, March 21, 2011)]
[Notices]
[Pages 15313-15315]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-6493]
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FEDERAL TRADE COMMISSION
[File No. 102 3087]
Chitika, Inc.; Analysis of Proposed Consent Order To Aid Public
Comment
AGENCY: Federal Trade Commission.
ACTION: Proposed consent agreement.
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SUMMARY: The consent agreement in this matter settles alleged
violations of federal law prohibiting unfair or deceptive acts or
practices or unfair methods of competition. The attached Analysis to
Aid Public Comment describes both the allegations in the draft
complaint and the terms of the consent order--embodied in the consent
agreement--that would settle these allegations.
DATES: Comments must be received on or before April 14, 2011.
ADDRESSES: Interested parties are invited to submit written comments
electronically or in paper form. Comments should refer to ``Chitika,
File No. 102 3087'' to facilitate the organization of comments. Please
note that your comment--including your name and your state--will be
placed on the public record of this proceeding, including on the
publicly accessible FTC Web site, at http://www.ftc.gov/os/publiccomments.shtm.
Because comments will be made public, they should not include any
sensitive personal information, such as an individual's Social Security
Number; date of birth; driver's license number or other state
identification number, or foreign country equivalent; passport number;
financial account number; or credit or debit card number. Comments also
should not include any sensitive health information, such as medical
records or other individually identifiable health information. In
addition, comments should not include any ``[t]rade secret or any
commercial or financial information which is obtained from any person
and which is privileged or confidential * * *'' as provided in Section
6(f) of the FTC Act, 15 U.S.C. 46(f), and Commission Rule 4.10(a)(2),
16 CFR 4.10(a)(2). Comments containing material for which confidential
treatment is requested must be filed in paper form, must be clearly
labeled ``Confidential'', and must comply with FTC Rule 4.9(c), 16 CFR
4.9(c).\1\
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\1\ The comment must be accompanied by an explicit request for
confidential treatment, including the factual and legal basis for
the request, and must identify the specific portions of the comment
to be withheld from the public record. The request will be granted
or denied by the Commission's General Counsel, consistent with
applicable law and the public interest. See FTC Rule 4.9(c), 16 CFR
4.9(c).
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Because paper mail addressed to the FTC is subject to delay due to
heightened security screening, please consider submitting your comments
in electronic form. Comments filed in electronic form should be
submitted by using the following weblink: https://ftcpublic.commentworks.com/ftc/chitika and following the instructions
on the Web-based form. To ensure that the Commission considers an
electronic comment, you must file it on the Web-based form at the
https://ftcpublic.commentworks.com/ftc/chitika. If this Notice appears
at http://www.regulations.gov/search/index.jsp, you may also file an
electronic comment through that Web site. The Commission will consider
all comments that regulations.gov forwards
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to it. You may also visit the FTC Web site at http://www.ftc.gov/ to
read the Notice and the news release describing it.
A comment filed in paper form should include the ``Chitika, File
No. 102 3087'' reference both in the text and on the envelope, and
should be mailed or delivered to the following address: Federal Trade
Commission, Office of the Secretary, Room H-113 (Annex D), 600
Pennsylvania Avenue, NW., Washington, DC 20580. The FTC is requesting
that any comment filed in paper form be sent by courier or overnight
service, if possible, because U.S. postal mail in the Washington area
and at the Commission is subject to delay due to heightened security
precautions.
The Federal Trade Commission Act (``FTC Act'') and other laws the
Commission administers permit the collection of public comments to
consider and use in this proceeding as appropriate. The Commission will
consider all timely and responsive public comments that it receives,
whether filed in paper or electronic form. Comments received will be
available to the public on the FTC Web site, to the extent practicable,
at http://www.ftc.gov/os/publiccomments.shtm. As a matter of
discretion, the Commission makes every effort to remove home contact
information for individuals from the public comments it receives before
placing those comments on the FTC Web site. More information, including
routine uses permitted by the Privacy Act, may be found in the FTC's
privacy policy, at http://www.ftc.gov/ftc/privacy.shtm.
FOR FURTHER INFORMATION CONTACT: Peder Magee (202-326-3538) or Tracy
Shapiro (202-326-2343), FTC Bureau of Consumer Protection, 600
Pennsylvania Avenue, NW., Washington, DC 20580.
SUPPLEMENTARY INFORMATION: Pursuant to section 6(f) of the Federal
Trade Commission Act, 38 Stat. 721, 15 U.S.C. 46(f), and Sec. 2.34 the
Commission Rules of Practice, 16 CFR 2.34, notice is hereby given that
the above-captioned consent agreement containing a consent order to
cease and desist, having been filed with and accepted, subject to final
approval, by the Commission, has been placed on the public record for a
period of thirty (30) days. The following Analysis to Aid Public
Comment describes the terms of the consent agreement, and the
allegations in the complaint. An electronic copy of the full text of
the consent agreement package can be obtained from the FTC Home Page
(for March 14, 2010), on the World Wide Web, at http://www.ftc.gov/os/actions.shtm. A paper copy can be obtained from the FTC Public
Reference Room, Room 130-H, 600 Pennsylvania Avenue, NW., Washington,
DC 20580, either in person or by calling (202) 326-2222.
Public comments are invited, and may be filed with the Commission
in either paper or electronic form. All comments should be filed as
prescribed in the ADDRESSES section above, and must be received on or
before the date specified in the DATES section.
Analysis of Agreement Containing Consent Order To Aid Public Comment
The Federal Trade Commission has accepted, subject to final
approval, a consent agreement from Chitika, Inc. (``Chitika'').
The proposed consent order has been placed on the public record for
thirty (30) days for receipt of comments by interested persons.
Comments received during this period will become part of the public
record. After thirty (30) days, the Commission will again review the
agreement and the comments received, and will decide whether it should
withdraw from the agreement and take appropriate action or make final
the agreement's proposed order.
Chitika is a network advertiser that engages in online behavioral
advertising, the practice of tracking consumers' activities online in
order to serve them targeted advertisements based upon their individual
Web browsing activity. Chitika offers an online behavioral advertising
service in which it acts as an intermediary between Web site publishers
and advertisers that wish to have their advertisements placed on
websites. Chitika tracks the searches a consumer has conducted, the
websites visited, and the content viewed in order to serve advertising
targeted to the individual consumer's interests. When a consumer visits
a Web site within Chitika's network of Web site publishers, Chitika
sets a new cookie or automatically receives a cookie it has previously
set in the consumer's browser (the ``Chitika tracking cookie'').
Chitika uses cookies to serve advertisements to consumers that are
targeted to their interests.
The Commission alleges that representations Chitika made in its
privacy policy regarding consumers' ability to opt out of receiving
tracking cookies were false or misleading. Chitika's privacy policy
stated that consumers could opt out of receiving Chitika cookies. For
those consumers who elected to opt out, Chitika set an ``opt-out
cookie'' in the consumer's browser so that no additional cookies would
be set in the consumer's browser, no additional information would be
added to a previously set Chitika tracking cookie, and the data
previously placed in the cookie would no longer be used to target
advertisements to the consumer. From at least May 2008 to February 28,
2010, however, Chitika delivered opt-out cookies that were set to
expire after ten (10) days. Accordingly, the complaint alleges that
Chitika deceived consumers and violated Section 5 of the FTC Act by
making an unqualified claim that consumers could opt out of targeted
advertising when the opt out expired in ten (10) days.
Part I of the proposed order prohibits Chitika from misrepresenting
(1) the extent of its data collection about consumers and (2) the
extent to which consumers are able to control the collection, use, or
sharing of their data.
Part II of the proposed order requires Chitika to take a number of
steps to improve the transparency of, and consumers' ability to
control, its collection of consumer data for online behavioral
advertising. First, within thirty (30) days after service of the
proposed order, Chitika must place a clear and prominent notice with a
hyperlink on the homepage of its Web site that states: ``We collect
information about your activities on certain websites to send you
targeted advertisements. To opt out of Chitika's targeted ads, click
here.'' The mechanism that Chitika provides to allow consumers to
prevent Chitika from collecting information about them must remain in
effect for a minimum of five (5) years. Within close proximity to the
mechanism, Chitika must disclose: (1) That Chitika collects information
about consumers' activities on certain websites to deliver targeted
ads; (2) that by opting out, Chitika will not collect this information
to deliver such ads; (3) consumers' current choice status (i.e.,
whether opted in or opted out of tracking); and (4) that consumers'
choice is specific to the browser they are using (i.e., if they switch
browsers or devices, they will have to opt out again).
Part II of the proposed order includes two additional provisions.
First, for a period of one (1) year, near the notice and hyperlink
discussed above, Chitika's homepage must state that: ``If you opted out
of our targeted ads before March 1, 2010, the opt-out has expired and
you must opt out again to avoid targeted ads.''
The final provision in Part II requires that within any
behaviorally targeted advertisement that Chitika serves, it must
include a hyperlink that takes consumers directly to the required
choice mechanism. The hyperlink text
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must state: ``Opt out?'' When a consumer's cursor, or equivalent, is
placed over the hyperlink, a box shall be visible that clearly and
prominently states, ``Opt out of Chitika's targeted ads.''
Part III of the proposed order restricts Chitika's use of any data
that it collected from consumers prior to March 1, 2010, the date on
which Chitika extended the expiration date of its opt-out cookies from
ten (10) days to ten (10) years. Specifically, the proposed order
prevents Chitika from using, selling, or transferring ``any information
that can be associated with a Chitika user or a Chitika user's computer
or device'' that the company obtained prior to March 1, 2010. In
addition to restricting the use of this data, within sixty (60) days
after the service of the order, Chitika must delete any such
information stored in Chitika users' cookies and any information
retained in Chitika's files that would allow the information to be
associated with a particular consumer or that consumer's computer or
device.
Parts IV through VIII of the proposed order are reporting and
compliance provisions. Part IV requires Chitika to retain documents
relating to its compliance with the order. Part V requires
dissemination of the order to all current and future principals,
officers, directors, managers, employees, agents, and representatives
having responsibilities relating to the subject matter of the order.
Part VI ensures notification to the FTC of changes in corporate status.
Part VII mandates that Chitika submit a report to the Commission
detailing its compliance with the order. Part VIII provides that the
order expires after twenty (20) years, with certain exceptions.
The purpose of the analysis is to aid public comment on the
proposed order. It is not intended to constitute an official
interpretation of the proposed order or to modify its terms in any way.
By direction of the Commission.
Donald S. Clark,
Secretary.
[FR Doc. 2011-6493 Filed 3-18-11; 8:45 am]
BILLING CODE 6750-01-P