California Do-Not-Track Legislation Passes its First Hurdle

As in so many other areas, California is playing a leading role in enacting legislation designed to protect California Internet users from unwanted online advertising methods.

The California Do-Not Track bill, SB-761, passed a Senate Judiciary Committee vote last week, and now moves on to the Appropriations Committee.  Afterwards (assuming it passes muster in its current form), the bill must also pass the Senate and State Assembly before landing on Governor Jerry Brown’s desk.

If enacted into law, the bill would give California consumers a simple way of opting out of data collection systems that keep track of their online activities. Opponents of the bill include Google, the Direct Marketing Association, and the wireless industry group CTIA, who argue that it puts an unnecessary burden on online commerce.

Google and other online marketers are in the advertising business; essentially, they’re factories that manufacture customers for their clients. As with any other manufacturing business, the more efficient you are at producing your product, the greater your profit margin.  In this case, the use of online tracking software, makes online marketing more efficient by enabling marketers to deliver advertising targeted to meet the needs of the consumers whose online behavior they track.

So what’s wrong with that proposition?  After all, consumers also stand to win by being presented with ads for products they may actually want or need, rather than being bombarded by ads for products that don’t.

Of course, the problem lies with the “Big Brother” aspect of online tracking practices.  After all, nobody wants some faceless algorithm looking over their shoulder, keeping track of everywhere they go and everything they do, even if they eventually wind up receiving some kind of benefit for it.  The fact is, to a lot of people, it’s just plain creepy.

Under the proposed law, users would have a simple way (possibly through a browser setting) of instructing Web sites not to track them.  If a company disregarded this request and collected data without permission, it could face stiff fines.

Even though several browsers offer a way ask Web sites to stop behavioral tracking,  there’s nothing forcing online marketers to comply with consumers’ requests. Members of Congress are working on federal legislation with the same goal of the California Bill by adding meaningful consequences when Websites ignore consumer requests to not be tracked.

Although the bill faces many hurdles before it becomes law, it is the first time Do-Not-Track legislation has made it out of committee.  This is not the first time California spearheaded the creation of federal law.  The state led the nation with its Do Not Call legislation, which curbed telemarketing practices. Two years later, the federal government followed California’s lead and set up its National Do Not Call registry.

 



Author: Seth Heyman
Seth D. Heyman is a California attorney with extensive experience in advertising and marketing law, corporate law, contracts, governmental regulations, international business, and Internet law. He has counseled numerous successful companies, both public and private, and was responsible for regulatory compliance, contract management, corporate governance, and HR best practices for multiple organizations in many diverse industries, including marketing, telecommunications, energy, and technology development. He offers insight and guidance on federal and state direct mail, TV, radio, telemarketing, and Internet marketing laws, as well as online promotions, Internet privacy, data protection regulations, and similar matters.

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