Rethinking the Cost and Benefits of Behavioral Targeting

Online behavioral targeting, also known as behavioral advertisement, involves tracking an individual’s online activities for the purpose of delivering tailored services or advertisement to a user. During the 2012 elections, it was revealed that even politicians used behavioral targeting in their campaigns. Online behavioral tracking has been proven to be extremely valuable because not only does it allow interested parties to align their advertisement with what the individual is likely to purchase, it also enables useful features to Internet users such as saving customized personal preferences and settings on the web.

Behavioral targeting has generated a form of service providers called network advertisers, companies that compile and classify expensive consumer profiles and deliver appropriate advertisements to participating websites across their network. Companies generally use “cookies”, amongst other tracking methods, to track consumer activities by associating those activities with a particular computer or electronic device.

Despite the Federal Trade Commission's efforts in setting self-regulatory principles, there is currently no law in the U.S that expressly addresses behavioral targeting. Typically, data that network advertisers collect does not fall under any existing privacy regulations because it does not include any personal identifying information, such as the user’s real name or other identifying information that can tie the user to his/her real identity.

Those who oppose to such act of data collection argue that behavioral targeting constitutes a breach of privacy because it implicates some form of personal information and more importantly, it invades an individual’s “inner identity”. A complete consumer data profile is, in a way, an attempt to replicate the individual’s personality in order to create customized advertisements. Such exploration can be more private and valuable than some aspects of external identity. For instance, the delivery of advertisements may reveal private browsing history such as religious beliefs or sexual orientation to other users of the same electronic device because cookies track the online activities of a device, not of a particular person. In other words, behavioral targeting may lead to not only identify thefts, but also embarrassment, inconvenience, and unfairness.

While many consumers in the U.S remain unaware that their online activities are being tracked, the European Union has heavily promoted Internet privacy awareness. Amongst other regulations, the e-Privacy Directive requires each member of the European Union to legislate the collection, use, and disclosure of personal information. Furthermore, the Directive requires all Internet firms and any other business that process data to obtain informed consent from data protection authority, as well as individuals, before commencing any data collection and processing.

There is an urgent need for the Legislature to find a way to balance data utility and privacy. Don’t you think it is about time that pair of shoes you checked out last week stops following you everywhere?