How does the FTC Act regulate behavioral advertising?
Callahan: Section 5 of the Federal Trade Commission Act prohibits deceptive or unfair practices, and is essentially the cornerstone of federal consumer protection law. A deceptive practice is a material representation, omission, or practice that is likely to mislead reasonable consumers, while an unfair practice is one that involves substantial harm where the harm is not reasonably avoidable by consumers, and benefits to consumers do not outweigh the harm. For the past dozen years, the FTC has used its Section 5 authority related to online activities and privacy specifically. In fact, in 1999, the FTC sponsored a workshop related to online advertising; as a result of that workshop, the Network Advertising Initiative (NAI) – the self-regulatory group of network advertisers – was formed. The FTC held another public meeting in November 2007 on behavioral advertising specifically, and since that time has issued its draft staff principles on self-regulatory behavioral advertising, and has c
