[Federal Register Volume 76, Number 54 (Monday, March 21, 2011)]
[Notices]
[Pages 15313-15315]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-6493]


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FEDERAL TRADE COMMISSION

[File No. 102 3087]


Chitika, Inc.; Analysis of Proposed Consent Order To Aid Public 
Comment

AGENCY: Federal Trade Commission.

ACTION: Proposed consent agreement.

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SUMMARY: The consent agreement in this matter settles alleged 
violations of federal law prohibiting unfair or deceptive acts or 
practices or unfair methods of competition. The attached Analysis to 
Aid Public Comment describes both the allegations in the draft 
complaint and the terms of the consent order--embodied in the consent 
agreement--that would settle these allegations.

DATES: Comments must be received on or before April 14, 2011.

ADDRESSES: Interested parties are invited to submit written comments 
electronically or in paper form. Comments should refer to ``Chitika, 
File No. 102 3087'' to facilitate the organization of comments. Please 
note that your comment--including your name and your state--will be 
placed on the public record of this proceeding, including on the 
publicly accessible FTC Web site, at http://www.ftc.gov/os/publiccomments.shtm.
    Because comments will be made public, they should not include any 
sensitive personal information, such as an individual's Social Security 
Number; date of birth; driver's license number or other state 
identification number, or foreign country equivalent; passport number; 
financial account number; or credit or debit card number. Comments also 
should not include any sensitive health information, such as medical 
records or other individually identifiable health information. In 
addition, comments should not include any ``[t]rade secret or any 
commercial or financial information which is obtained from any person 
and which is privileged or confidential * * *'' as provided in Section 
6(f) of the FTC Act, 15 U.S.C. 46(f), and Commission Rule 4.10(a)(2), 
16 CFR 4.10(a)(2). Comments containing material for which confidential 
treatment is requested must be filed in paper form, must be clearly 
labeled ``Confidential'', and must comply with FTC Rule 4.9(c), 16 CFR 
4.9(c).\1\
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    \1\ The comment must be accompanied by an explicit request for 
confidential treatment, including the factual and legal basis for 
the request, and must identify the specific portions of the comment 
to be withheld from the public record. The request will be granted 
or denied by the Commission's General Counsel, consistent with 
applicable law and the public interest. See FTC Rule 4.9(c), 16 CFR 
4.9(c).
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    Because paper mail addressed to the FTC is subject to delay due to 
heightened security screening, please consider submitting your comments 
in electronic form. Comments filed in electronic form should be 
submitted by using the following weblink: https://ftcpublic.commentworks.com/ftc/chitika and following the instructions 
on the Web-based form. To ensure that the Commission considers an 
electronic comment, you must file it on the Web-based form at the 
https://ftcpublic.commentworks.com/ftc/chitika. If this Notice appears 
at http://www.regulations.gov/search/index.jsp, you may also file an 
electronic comment through that Web site. The Commission will consider 
all comments that regulations.gov forwards

[[Page 15314]]

to it. You may also visit the FTC Web site at http://www.ftc.gov/ to 
read the Notice and the news release describing it.
    A comment filed in paper form should include the ``Chitika, File 
No. 102 3087'' reference both in the text and on the envelope, and 
should be mailed or delivered to the following address: Federal Trade 
Commission, Office of the Secretary, Room H-113 (Annex D), 600 
Pennsylvania Avenue, NW., Washington, DC 20580. The FTC is requesting 
that any comment filed in paper form be sent by courier or overnight 
service, if possible, because U.S. postal mail in the Washington area 
and at the Commission is subject to delay due to heightened security 
precautions.
    The Federal Trade Commission Act (``FTC Act'') and other laws the 
Commission administers permit the collection of public comments to 
consider and use in this proceeding as appropriate. The Commission will 
consider all timely and responsive public comments that it receives, 
whether filed in paper or electronic form. Comments received will be 
available to the public on the FTC Web site, to the extent practicable, 
at http://www.ftc.gov/os/publiccomments.shtm. As a matter of 
discretion, the Commission makes every effort to remove home contact 
information for individuals from the public comments it receives before 
placing those comments on the FTC Web site. More information, including 
routine uses permitted by the Privacy Act, may be found in the FTC's 
privacy policy, at http://www.ftc.gov/ftc/privacy.shtm.

FOR FURTHER INFORMATION CONTACT: Peder Magee (202-326-3538) or Tracy 
Shapiro (202-326-2343), FTC Bureau of Consumer Protection, 600 
Pennsylvania Avenue, NW., Washington, DC 20580.

SUPPLEMENTARY INFORMATION: Pursuant to section 6(f) of the Federal 
Trade Commission Act, 38 Stat. 721, 15 U.S.C. 46(f), and Sec.  2.34 the 
Commission Rules of Practice, 16 CFR 2.34, notice is hereby given that 
the above-captioned consent agreement containing a consent order to 
cease and desist, having been filed with and accepted, subject to final 
approval, by the Commission, has been placed on the public record for a 
period of thirty (30) days. The following Analysis to Aid Public 
Comment describes the terms of the consent agreement, and the 
allegations in the complaint. An electronic copy of the full text of 
the consent agreement package can be obtained from the FTC Home Page 
(for March 14, 2010), on the World Wide Web, at http://www.ftc.gov/os/actions.shtm. A paper copy can be obtained from the FTC Public 
Reference Room, Room 130-H, 600 Pennsylvania Avenue, NW., Washington, 
DC 20580, either in person or by calling (202) 326-2222.
    Public comments are invited, and may be filed with the Commission 
in either paper or electronic form. All comments should be filed as 
prescribed in the ADDRESSES section above, and must be received on or 
before the date specified in the DATES section.

Analysis of Agreement Containing Consent Order To Aid Public Comment

    The Federal Trade Commission has accepted, subject to final 
approval, a consent agreement from Chitika, Inc. (``Chitika'').
    The proposed consent order has been placed on the public record for 
thirty (30) days for receipt of comments by interested persons. 
Comments received during this period will become part of the public 
record. After thirty (30) days, the Commission will again review the 
agreement and the comments received, and will decide whether it should 
withdraw from the agreement and take appropriate action or make final 
the agreement's proposed order.
    Chitika is a network advertiser that engages in online behavioral 
advertising, the practice of tracking consumers' activities online in 
order to serve them targeted advertisements based upon their individual 
Web browsing activity. Chitika offers an online behavioral advertising 
service in which it acts as an intermediary between Web site publishers 
and advertisers that wish to have their advertisements placed on 
websites. Chitika tracks the searches a consumer has conducted, the 
websites visited, and the content viewed in order to serve advertising 
targeted to the individual consumer's interests. When a consumer visits 
a Web site within Chitika's network of Web site publishers, Chitika 
sets a new cookie or automatically receives a cookie it has previously 
set in the consumer's browser (the ``Chitika tracking cookie''). 
Chitika uses cookies to serve advertisements to consumers that are 
targeted to their interests.
    The Commission alleges that representations Chitika made in its 
privacy policy regarding consumers' ability to opt out of receiving 
tracking cookies were false or misleading. Chitika's privacy policy 
stated that consumers could opt out of receiving Chitika cookies. For 
those consumers who elected to opt out, Chitika set an ``opt-out 
cookie'' in the consumer's browser so that no additional cookies would 
be set in the consumer's browser, no additional information would be 
added to a previously set Chitika tracking cookie, and the data 
previously placed in the cookie would no longer be used to target 
advertisements to the consumer. From at least May 2008 to February 28, 
2010, however, Chitika delivered opt-out cookies that were set to 
expire after ten (10) days. Accordingly, the complaint alleges that 
Chitika deceived consumers and violated Section 5 of the FTC Act by 
making an unqualified claim that consumers could opt out of targeted 
advertising when the opt out expired in ten (10) days.
    Part I of the proposed order prohibits Chitika from misrepresenting 
(1) the extent of its data collection about consumers and (2) the 
extent to which consumers are able to control the collection, use, or 
sharing of their data.
    Part II of the proposed order requires Chitika to take a number of 
steps to improve the transparency of, and consumers' ability to 
control, its collection of consumer data for online behavioral 
advertising. First, within thirty (30) days after service of the 
proposed order, Chitika must place a clear and prominent notice with a 
hyperlink on the homepage of its Web site that states: ``We collect 
information about your activities on certain websites to send you 
targeted advertisements. To opt out of Chitika's targeted ads, click 
here.'' The mechanism that Chitika provides to allow consumers to 
prevent Chitika from collecting information about them must remain in 
effect for a minimum of five (5) years. Within close proximity to the 
mechanism, Chitika must disclose: (1) That Chitika collects information 
about consumers' activities on certain websites to deliver targeted 
ads; (2) that by opting out, Chitika will not collect this information 
to deliver such ads; (3) consumers' current choice status (i.e., 
whether opted in or opted out of tracking); and (4) that consumers' 
choice is specific to the browser they are using (i.e., if they switch 
browsers or devices, they will have to opt out again).
    Part II of the proposed order includes two additional provisions. 
First, for a period of one (1) year, near the notice and hyperlink 
discussed above, Chitika's homepage must state that: ``If you opted out 
of our targeted ads before March 1, 2010, the opt-out has expired and 
you must opt out again to avoid targeted ads.''
    The final provision in Part II requires that within any 
behaviorally targeted advertisement that Chitika serves, it must 
include a hyperlink that takes consumers directly to the required 
choice mechanism. The hyperlink text

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must state: ``Opt out?'' When a consumer's cursor, or equivalent, is 
placed over the hyperlink, a box shall be visible that clearly and 
prominently states, ``Opt out of Chitika's targeted ads.''
    Part III of the proposed order restricts Chitika's use of any data 
that it collected from consumers prior to March 1, 2010, the date on 
which Chitika extended the expiration date of its opt-out cookies from 
ten (10) days to ten (10) years. Specifically, the proposed order 
prevents Chitika from using, selling, or transferring ``any information 
that can be associated with a Chitika user or a Chitika user's computer 
or device'' that the company obtained prior to March 1, 2010. In 
addition to restricting the use of this data, within sixty (60) days 
after the service of the order, Chitika must delete any such 
information stored in Chitika users' cookies and any information 
retained in Chitika's files that would allow the information to be 
associated with a particular consumer or that consumer's computer or 
device.
    Parts IV through VIII of the proposed order are reporting and 
compliance provisions. Part IV requires Chitika to retain documents 
relating to its compliance with the order. Part V requires 
dissemination of the order to all current and future principals, 
officers, directors, managers, employees, agents, and representatives 
having responsibilities relating to the subject matter of the order. 
Part VI ensures notification to the FTC of changes in corporate status. 
Part VII mandates that Chitika submit a report to the Commission 
detailing its compliance with the order. Part VIII provides that the 
order expires after twenty (20) years, with certain exceptions.
    The purpose of the analysis is to aid public comment on the 
proposed order. It is not intended to constitute an official 
interpretation of the proposed order or to modify its terms in any way.

    By direction of the Commission.
Donald S. Clark,
Secretary.
[FR Doc. 2011-6493 Filed 3-18-11; 8:45 am]
BILLING CODE 6750-01-P