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BizReport : Law & Regulation : October 16, 2009


U.K. and U.S. to scrutinize behavioral and price targeting

Officials in the U.K. and across the pond in the U.S. are investigating whether or not behavioral advertising and individually-targeted prices on the Internet violate the rights of consumers.

by Helen Leggatt

The Office of Fair Trading in the U.K. has recently launched two studies into online advertising practices. The recent announcement declared they were to focus on "behavioral advertising and customized pricing, where prices are individually tailored using information collected about a consumer's Internet use".

The first study will examine online targeting of advertising and prices, including scenarios where prices are individually tailored using information collected about a consumer's Internet use.

The second will investigate price-related advertising practices that could "mislead consumers", such as 'drip' pricing, where prices increase incrementally during the buying process, and three-for-two or one-day sale offers.

"These studies will ensure that we keep up to date with the latest developments and, in particular, on how new pricing and advertising practices are emerging and evolving online," said Heather Clayton, OFT Senior Director.

"It is very important that the OFT's approach to potentially misleading practices remains well-informed by a sound evidence base, so we effectively protect consumers while allowing firms to compete freely."

The OFT's studies are expected to be completed in Spring and Summer next year.

After a recent report was released showing that Americans reject tailored advertising, U.S. Congress will debate behavioral targeting in the near future thanks to a bill being drafted by Rep. Rick Boucher, D-VA., chairman of the House Energy and Commerce Sub-committee on Communications, Technology and the Internet.

"Our goal is not to hinder online advertising," said Boucher. "This will make people more likely to trust electronic commerce and the Internet."






Tags: behavioral advertising, behavioral targeting, consumer rights, consumer targeting, e-commerce, law, online advertising, regulation








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