NEWS16 March 2011

FTC settles with Chitika over ‘deceptive’ opt-out policy

Legal North America

US— The Federal Trade commission (FTC) has reached a settlement with online advertising agency Chitika that ends the firm’s allegedly deceptive practice of tracking consumers’ online activities, even after they had opted out of online tracking.

The FTC claims that, between May 2008 and February 2010, opt-out cookies placed by Chitika at the request of users were set to expire after just 10 days.

The settlement bars Chitika from making misleading statements about the extent of data collection about consumers and the extent to which consumers can control the collection, use or sharing of their data. It requires that every targeted ad include a hyperlink that takes consumers to a clear opt-out mechanism that allows them to opt out for at least five years.

In addition, Chitika must destroy all identifiable consumer information collected while the 10-day opt-out period was in place and tell users who previously opted out that they must do so again to avoid having their browsing habits tracked.