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The Federal Trade Commission told an attorney for DoubleClick on Monday that the commission has closed its investigation of the company’s data-handling practices. For more than a year, DoubleClick, the biggest online advertising server company and a major online advertiser, has been cited by privacy advocates as the prime example of why a new federal law is needed to safeguard Internet privacy. DoubleClick sparked a firestorm of controversy last year with its abortive plan to combine online tracking data with offline personal data, such as names and addresses, culled from the files of Abacus Direct, an offline direct marketer that DoubleClick bought in 1999. The FTC had been investigating whether DoubleClick’s data handling constituted an “unfair or deceptive” trade practice. According to Monday’s FTC letter to Christine Varney, a Washington attorney and a former Federal Trade Commissioner who represents DoubleClick, the FTC’s Bureau of Consumer Protection staff now believes that the company “never used or disclosed consumers’ [personal data] for purposes other than those disclosed in its privacy policy.” “DoubleClick has always maintained that they haven’t merged any non-personally identifying information with personally identifying information,” says Varney. “The FTC has conducted the most thorough investigation possible and has given them a clean bill of health.” Varney’s upbeat assessment notwithstanding, online-privacy legislation likely will be the most pressing technology policy issue on Capitol Hill this year, and the 107th Congress is widely expected to pass an Internet privacy law in some form. The Bush administration has been circumspect about whether the new president would sign such a bill. The privacy storm that erupted around DoubleClick’s initial decision last year not to back away from its plans to link personally identifying and non-personally identifying information sent the company’s stock into a downward spiral. Executives first attempted to manage the controversy by saying they would proceed with the information linking but temper any negative effects with a five-point plan to protect privacy. But on March 16, then-CEO Kevin O’Connor retreated, saying it was a mistake for his company to consider linking the data before industry-wide privacy standards are in place. The fact that DoubleClick is the subject of privacy investigations by several state attorneys general hasn’t helped the company’s stock either, nor has the rapid decline of the online ad sector since the mid-March dot-com stock meltdown. DoubleClick has lost 86 percent of its value during the last year, closing on Monday at $15.25, down from $107.63 last Feb. 1. In July, the FTC struck a deal with the Network Advertising Initiative, a consortium of DoubleClick and its major competitors, whereby NAI members agreed to uphold a strict set of self-regulatory data-privacy standards. “DoubleClick remains committed to ensuring the highest level of online consumer privacy, both within our company and throughout the industry,” DoubleClick CEO Kevin Ryan said in a statement. Monday’s FTC letter notes that DoubleClick has “committed” to disclosing more information regarding several of its practices in the next iteration of its privacy policy, including the company’s use of tiny, clear GIF files, known as “Web bugs” that track and collect data about Web surfers. But such measures don’t go far enough for Marc Rotenberg, executive director of the Electronic Privacy Information Center, which filed a formal complaint last February asking the FTC to investigate DoubleClick’s data practices, and it also is conducting its own investigation of the FTC’s complaint-handling procedures. “I’m very disappointed and somewhat surprised,” he says. “We raised a whole series of factual issues [in the complaint.] It looks to me like the FTC’s staff just completely misses the point.” Related Articles from The Industry Standard: DoubleClick Will Miss the Mark DoubleClick to Cut 100 to 150 Jobs DoubleClick Names New CEO Copyright � 2001 The Industry Standard

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