Report | Internet privacy | NAI — The World Privacy Forum published a new report today, The Network Advertising Initiative: Failing at Consumer Protection and at Self-Regulation. The report is an in-depth analysis of the history and current operations of the National Advertising Initiative (NAI) self-regulatory agreement. The NAI was created to protect consumers’ online privacy in the behavioral advertising arena. The report finds that the NAI has failed. The report discusses the failure of the NAI opt-out cookie, the uses of persistent consumer tracking technologies that go beyond cookies, such as Flash cookies, browser cache cookies, XML super cookies, and other issues. The report also discusses the practice of re-setting cookies after cookie deletion. The report gathers the details of the difficult membership history of the NAI, as well as the enforcement history of TRUSTe regarding NAI.

A traditional cookie as defined by the NAI is not the only persistent identifier and tracker available to network advertisers and marketers anymore. New technologies and techniques have become routine business practice since the original NAI was written, particularly in the area of persistent identifiers and tracking technologies. A rich array of browser cache cookies, Flash cookies, and other non-NAI-covered tracking techniques not only exist, but are in use today.

For a formal self-regulatory group, the NAI membership includes only a fraction of the industry engaging in behavioral ad targeting. The low numbers have plagued the NAI for its entire existence. One aspect of the problem has been the establishment of a non-full compliance membership category.

One of the issues raised in the FTC reports to Congress about online behavioral profiling was notice. The FTC and the NAI promised “robust” enforcement of notice. Unfortunately, because the foundational understandings of the NAI are out of date, the NAI ideas of notice that flow from those understandings are also out of date.

TRUSTe began reporting on NAI complaints in March 2002. It used its Watchdog Reports to do this. In the intervening years, TRUSTe public reports regarding the NAI reveal a troubling, systematic reduction of transparency regarding the NAI. (See Appendix B for a complete listing of all TRUSTe NAI complaints.)