Chitika Admits Online Tracking of Customers, Makes Peace with FTC

By Narayan Bhat

TMCnet Contributor

 

 Online advertising company Chitika, Inc., has promised the Federal Trade Commission that it would not block any customer opting out of service for a long period, and insisted that it never collect any personally identifiable information (PII) for boosting a business.

 

Chitika runs an ad business akin to Google's AdSense: displaying ads on websites based on the viewer's online activities. The allegation against Chitika was that it was collecting personally identifiable information and showing customers ads even after they signed out of its service.

 

Chitika's privacy policy makes it clear that consumers can choose not to have cookies on their browsers and deny targeted ads whenever they like.

 

'Personally identifiable information is of no interest to me whatsoever,' said Chitika CEO and founder Venkat Kolluri, in a statement. 'Our advertisements only worry about what you want, not who you are.'

 

However, Chitika admitted that it was not aware of its mistake until the FTC (News - Alert) brought it to its notice in February 2010. And on March 1, 2010 the company said it had fixed the problem.

 

Since March 1, 2010, Chitika's option to opt out of any behavioral targeting is a 10-year opt-out. Prior to March 1, 2010, an error in Chitika's opt-out process mistakenly set opt outs to expire in 10 days rather than the intended 10 years, Chitika explained in its statement.

 

According to the FTC, Chitika allowed consumers to opt-out only for 10 days, and after that period it would place tracking cookies on their browsers displaying targeted ads again.

 

The bug had troubled the customers for nearly two years, between May 2008 and February 2010.

 

The settlement with FTC requires Chitika to alert consumers, who previously tried to opt out, that they should opt out again to avoid receiving targeted ads in the future.

 

Chitika's targeting consists of data such as browser, search engine and search keywords, all of which allow the company to provide appropriate advertisements.

 

The company continues to insist that non-PII data is a targeting method that is best for not only users, but also advertisers and publishers.