June 15, 1999 6:55 PM PDT

DoubleClick not worried about privacy charges

DoubleClick is not sweating over the plans of privacy watchdogs to upset the $1 billion merger of the Internet advertiser and market researcher Abacus Direct, a top DoubleClick executive said today.

Under the deal, DoubleClick's advertising network would correlate the names and addresses of Net shoppers with the Abacus Alliance database of consumer buying habits, made up of more than 2 billion consumer catalog transactions, to allow marketers in both media to target potential customers more efficiently.

As first reported by CNET News.com yesterday, consumer groups are planning to file a complaint with the Federal Trade Commission this week to try to block the deal on grounds that it could create an unprecedented database of personal information without consumers' prior consent.

DoubleClick says it hasn't received any complaints about the pending merger, and that no consumer groups have contacted the company directly.

"We don't think it's an issue," said Kevin Ryan, DoubleClick's president.

"I've been very active on the online privacy issues with the FTC since 1997," he added. "We spent a lot of time on this in discussing the merger--if consumers are not happy, neither one of us has a business."

Online data collection has become the cornerstone of contentious international policy debate that is closely tied to the growing the e-commerce sector where consumers forfeit sensitive data in return for goods and services. Privacy advocates around the globe are lobbying for stronger laws to give Net users control over their data.

DoubleClick and Abacus allow consumers to opt out of their databases, and both have disclosure policies about what they do with data once it is collected. The firms also are leading members of the Online Privacy Alliance and the Direct Marketing Association, respectively, and comply with self-regulatory data collection policies promoted by the organizations.

Still that's not good enough for privacy guardians, who are planning to launch a relentless campaign reminiscent of the tactics they used to press for an FTC investigation into Intel's Pentium III processor, which critics charge could be used to track a computer users through a permanent identification number.

Privacy groups fear the new company intends to facilitate the exchange of data between DoubleClick's network of more than 1,300 Web sites and Abacus's 1,100 merchandise catalog companies.

These same groups will try to force DoubleClick and Abacus to obtain consent from consumers before sharing data, and will try to hit DoubleClick and Abacus where it hurts most--on Wall Street. The consumer groups drafting a petition to the FTC also will go on a "roadshow" trying to get mutual-fund managers to drop the companies from their portfolios unless they adopt strong measures to shield consumers' names, addresses, and buying habits.

"Notice is not enough--they will be getting the information unfairly. They must get consent," said Jason Catlett, founder of Junkbusters, a clearinghouse for privacy-protection measures.

But it is unlikely that the new venture will force its collective members to get prior permission from consumers before exchanging addresses and matching up their offline and online shopping habits.

"We're not in a position to do that," Ryan said. "We would encourage everyone to have a full disclosure, and we are going to absolutely stick to the opt-out policy."

And DoubleClick says there is no demand for prior consent. For instance, of the 75 million people per month who view DoubleClick network ads, only ten per day elect to remove the company's cookie, which tracks surfing habits, from their computers.

Nonetheless, DoubleClick says it wants to hear out consumer groups.

"We meet as regularly as we can with the FTC already, and we're going to schedule meetings with any consumer groups to hear their views and concerns," Ryan said.

 

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