Electronic profiling without express prior consent does not violate US data privacy laws, held Judge Naomi Rice Buchwald in the US District Court for the Southern District of New York. This report from Hall Dickler Kent Goldstein & Wood of New York.
Topic: Data Privacy
Who: DoubleClick
Where: U.S. District Court for the Southern District of New York
When: April 2001
What happened:
Judge Naomi Rice Buchwald of the U.S. District Court for the Southern District of New York has dismissed a class action suit against DoubleClick that alleged that the placement of cookies on hard drives violates federal privacy and anti-hacking laws. In her decision in In re DoubleClick Inc. Privacy Litigation, Judge Buchwald held that electronic profiling does not violate a person’s privacy and is commensurate with other forms of marketing research. The Judge further found that although DoubleClick never received direct consent to collect usage information from visitors to Web sites on the company’s advertising network, it was protected by the express authorization given its affiliates by their users.
Plaintiffs’ complaint argued that DoubleClick’s use of cookies violates The Electronic Privacy Act, The Wiretap Act and The Computer Fraud and Abuse Act. The Judge, however, disagreed. In her opinion Judge Buchwald wrote that the complaint failed "to plead violations of any of the three federal statutes under which they bring suit." In addition, Judge Buchwald held that the collection of data, such as names, e-mail addresses, and usage activity, did not in and of itself cause economic damage to the plaintiffs. "We do not commonly believe that the economic value of our attention is unjustly taken by television or print advertising," wrote Buchwald. "We see no reason why Web site advertising should be treated any differently."
DoubleClick heralded the decision as a victory for the Internet advertising industry. "We are delighted with the Court’s decision," said DoubleClick CEO Kevin Ryan in a statement. "DoubleClick has always maintained that its business practices are in compliance with the law and this decision confirms that." The decision constitutes the first instance in which a judge has interpreted the three laws with regard to online advertising. Plaintiffs’ attorneys have not yet decided whether they will appeal the dismissal.
Why This Matters:
Over the last 18 months, class action attorneys around the United States have filed a number of suits against Internet advertising and e-commerce companies for alleged privacy violations. In re DoubleClick Inc. Privacy Litigation is the first such case to be decided. Judge Buchwald’s ruling that online profiling does not constitute an actionable offense under federal law constitutes a victory not only for DoubleClick, but also for the online marketing industry as a whole.
