DoubleClick Privacy Practices Subject of U.S., State Inquiries
Federal and New York state authorities have launched separate inquiries into how online advertising DoubleClick Inc. uses personal information from its Internet customers, raising fresh questions about the company’s Web privacy practices. DoubleClick’s stock fell 4% on the news Wednesday.
The inquiries by the Federal Trade Commission and the New York state attorney general’s office come after a privacy advocacy group complained to the FTC that DoubleClick misled Web users by amassing confidential information on their habits and identities, with the intent to sell it to advertisers.
DoubleClick also is targeted in six private lawsuits over its Web privacy practices, the company disclosed in filings this week with the Securities and Exchange Commission.
DoubleClick’s stock fell $4.81 to $106.63, before trading was halted early Wednesday afternoon on the Nasdaq Stock Market.
DoubleClick’s marketing practices have placed it at the vortex of a growing controversy between privacy advocates worried about the indiscriminate use of personal information on the Web, and marketers who seek to use the power of the Internet to target customers.
In a filing with the Securities and Exchange Commission, DoubleClick said the FTC was looking into “our collection and maintenance of information concerning Internet users.”
“We are fully cooperating and we applaud the FTC’s efforts to keep the Internet safe for consumers,” DoubleClick Chief Executive Kevin O’Connor added in a statement Wednesday.
A spokesman for New York State Atty. Gen. Eliot Spitzer said he also launched an inquiry “into DoubleClick’s business practices” and the company was voluntarily providing information.
A DoubleClick spokeswoman did not immediately return phone calls seeking additional comment.
The inquiries come after a complaint filed last week by the Washington-based Electronic Privacy Information Center, a privacy advocacy group. EPIC accused DoubleClick of seeking to build virtual dossiers on consumers’ buying habits and identities after assuring Web users that information collected about them would remain confidential.
DoubleClick has stated that the EPIC complaint is without merit.
An FTC spokesman would not confirm or deny its inquiry.
New York-based DoubleClick electronically inserts advertisements on about 1,500 Web sites on behalf of online advertisers.
