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Congress

FTC Bars Advertiser From Deceiving Internet Users

March 15, 2011

The Federal Trade Commission announced Tuesday that it has barred Westborough, Mass.-based Chitika, an online advertiser, from misleading consumers about its privacy policy. The company allows Internet users to opt out of being monitored online when they clicked on ads that Chitika places on websites. But the FTC found that from May 2008 to February 2010, the promised opt-outs lasted only ten days, instead of the promised 10 years.

The agency has now barred Chitika from misleading consumers and forced it to destroy any personal data that it collected using deceptive practices. The settlement with the FTC occurs as the Senate Commerce Committee prepares to hold a Wednesday hearing about online privacy, and as Sens. John Kerry, D-Mass., and John McCain, R-Ariz., ready major legislation in this area.

In a statement, Chitika claimed that the 10-day expiration was the result of an error that it never noticed for nearly two years until the FTC brought the matter to its attention. Reinforcing a concern raised by watchdogs -- that Web users rarely bother to opt out of being tracking online -- Chitika said it averaged a meager 30 opt-out requests per month over an international ad network that attracts more than 450 million consumers.

For more on the FTC settlement, click here

To learn more about Chitika, which according to its website means "snap of the fingers" in Telugu, a South Indian language, click here

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