According to the Federal Trade Commission, any targeted ad that shows up on a consumer’s computer must include a hyperlinked opt-out option that is good for at least five years. But for a period longer than 20 months, the lifespan of Chitika’s opt out was a mere 10 days.
The company’s business model is to acquire space on various websites, track the browsing habits of individuals, and sell the space to advertising wishing to target somebody with the individual’s particular browsing habits.
FTC said that clicking on the opt-out button produced a message informing the consumer that he/she was indeed opted out, but that after ten days, Chitika went ahead and started targeting the same consumer again.
The FTC said, “…from at least May 2008 through February 2010, Chitika’s opt-out lasted only 10 days. After that time, Chitika placed tracking cookies on browsers of consumers who had opted out and targeted ads to them again. The FTC charged Chitika’s claims about its opt-out mechanism were deceptive and violated federal law.”
As a result of the settlement, Chitika is barred “…from making misleading statements about the extent of data collection about consumers and the extent to which consumers can control the collection, use or sharing of their data. It requires that every targeted ad include a hyperlink that takes consumers to a clear opt-out mechanism that allows a consumer to opt out for at least five years. It also requires that Chitika destroy all identifiable user information collected when the defective opt out was in place. In addition, the settlement requires that Chitika alert consumers who previously tried to opt out that their attempt was not effective, and they should opt out again to avoid targeted ads.”