Copyright 2000 St. Louis Post-Dispatch, Inc.
St.
Louis Post-Dispatch
March 3, 2000, Friday, FIVE STAR LIFT EDITION
SECTION: BUSINESS, Pg. C6
LENGTH: 677 words
HEADLINE:
ONLINE AD AGENCY GIVES UP PLAN TO SELL DATA;
DOUBLECLICK BOWS TO PRIVACY
ADVOCATES
BYLINE: David E. Kalish; The Associated Press
DATELINE: NEW YORK
BODY:
Bowing to intense pressure from government authorities, investors
and privacy advocates, Web advertising firm DoubleClick on Thursday backed off
plans to amass a giant online database of people's names and Internet habits.
DoubleClick's reversal was applauded immediately by several leaders of
the broad backlash against Web-privacy intrusions. Weeks of legal actions and
government probes into DoubleClick Inc. have placed the online ad company at the
center of a growing clash between businesses seeking to exploit the Internet's
pervasiveness and those fearful of the consequences.
A big New
York-based firm, DoubleClick electronically inserts advertisements on about
1,500 sites on behalf of Web advertisers. "This is a great first step forward
for Internet privacy," said Ari Schwartz of the Center for Democracy and
Technology, a Washington-based group that tracks civil liberties on the
Internet.
"Companies will better recognize they have to take privacy
into account before building technologies or business practices on the
Internet."
The company's stock soared 4 percent, or $ 2.87 1/2, to $
83.43 3/4 after regular trading on the Nasdaq Stock Market. Still, that was
considerably lower than the stock's recent peak of $ 118.50 on Feb. 10, just
before the wave of criticism.
Sparking the outcry was DoubleClick's $
1.7 billion purchase last fall of direct-marketing company Abacus. DoubleClick
had planned to cross-reference its vast records of consumers' online habits --
information many people had thought was confidential -- with an Abacus database
that includes millions of names and other identifying data.
Although
data on Web surfers' online habits, such as where they visit and shop, often is
tracked by online marketers, the information can't be connected easily with a
person's identity.
Privacy groups worried that DoubleClick's plans would
make that possible, enabling the company to build virtual dossiers on consumers
that could be sold to marketers. Users could be deluged with junk mail and
potentially could be discriminated against by businesses that track everything
from health conditions to income status.
At least six private lawsuits
were filed against DoubleClick, and the Michigan attorney general's office
threatened to sue. Federal regulators and New York law enforcers launched
investigations, and several DoubleClick customers backed away from using the ad
agency.
DoubleClick Chief Executive Kevin O'Connor said in a statement,
"I made a mistake by planning to merge names with anonymous user activity across
Web sites in the absence of government and industry privacy standards."
"I think it's obviously significant," said Marc Rotenberg, general
counsel for the Electronic Privacy Information Center, a Washington-based
advocacy group. "The real critical thing to understand here is how important
anonymity is to the success of the Internet."
Not everyone was
mollified. Michigan Attorney General Jennifer Granholm said she was pleased by
"DoubleClick's acknowledgment that it made a mistake" but remained wary of the
company's privacy commitment.
Granholm continued to level criticism that
the company failed to disclose to users that it is "systematically implanting"
electronic files on the hard drives of users' computers - known as "cookies" in
tech parlance - without their knowledge or consent.
Granholm, who is
pushing for government rules to punish invaders of people's Web privacy, said
her office would meet with DoubleClick on March 13, as planned, to discuss how
the company would address Michigan's concerns.
DoubleClick and other Web
companies argue that the industry should be allowed to police itself and that
"targeted advertising," directed at consumers with specific online profiles, is
beneficial to businesses and to Web users.
"There's all sorts of
degrees," O'Connor said. "If no targeted advertising is available on the
Internet, it's almost impossible to make the Internet work. I'm confident we all
share the same goals: keeping the Internet free."
LOAD-DATE: March 3, 2000 
