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Big Brother may be at it again. Behavioral advertising - the tracking of consumer's Internet surfing activity to create tailored ads - has triggered an intense legal controversy that has law firms scrambling to stay on top of a burgeoning practice. Attorneys say that behavioral advertising is raising privacy, litigation and regulation fears among consumer advocates, the electronic commerce and advertising industries and legislators. Law firms are busy helping companies come up with a transparent way of letting consumers know that their online activities are being tracked and possibly shared. "Lawmakers and companies are having a tough time keeping up with this new frontier of Internet privacy issues, and there is growing consumer unrest about behavioral advertising, leading in some cases to consumer rebellion," said Lisa Sotto, a partner and head of the privacy and security data group in the New York office of Richmond, Va.-based Hunton & Williams. "Consumers find this type of tracking intrusive, and businesses are starting to take the consumer reaction seriously," she said. The buzz over behavioral advertising has been building since congressional hearings that were held last year, during which Congress called on Internet service providers (ISPs) to testify about a highly controversial advertising practice known as "deep-packet inspection." The practice gives companies the ability to track every Web site consumers visit and provides a detailed look at everything they're doing, such as where they're going on vacation, who is going, how much they spent on the trip and what credit card was used. But then came the first class action targeting behavioral advertising, filed against Foster City, Calif.-based NebuAd Inc., an online advertising company accused of spying on consumers from several states and allegedly violating their privacy and computer security rights. The lawsuit specifically alleges that NebuAd engaged in deep-packet inspection. Valentine v. Ne

Top House and Senate Democrats are working on legislation that would prevent online marketers from sharing Web-surfing information unless Internet users allowed them to. That's according to House Communications, Technology and the Internet Subcommittee chairman Rick Boucher (D.-Va.), who told Multichannel News that such a bill was in the works and was one of his top legislative priorities. The issue of online behavioral marketing has gained traction recently, spurred by privacy concerns and by media companies' need to find new ways for advertisers to reach aggregated audiences at a time of fragmented viewing and multiplying delivery platforms. Boucher's predecessor atop the committee, Rep. Edward Markey (D-Mass.), held a hearing last fall on the issue and helped quash a test by ad-tracking company NebuAd and cable operator Charter Communications. In an interview, Boucher said he was teaming with Reps. Cliff Stearns (R-Fla.), ranking member of his subcommittee, and Joe Barton (R-Texas), ranking full committee member, on a bill that would apply "across the board" to behavioral advertising and data collection by Web sites. "The goal would be to give the Internet user a sense that information about him that is collected by Web sites is well understood by the user, so he has an opportunity to know what is collected," Boucher said. "He would then have an opportunity to act in a way that prevents that Web site using that information to market him personally, and an even broader opportunity to prevent the transfer of that information about him to third parties." Boucher envisions a combination of opt-in and opt-out requirements. "Opt-in would apply where the information is conveyed to third parties," he said, while "opt out would apply where the Web site that collects the information is using that information directly to market the customers from whom it is collected." Center for Digital Democracy executive director Jeff Chester was please

Three out of four Americans believe that individuals are responsible for protecting their own privacy online. That's the bottom line of a new survey conducted by TRUSTe, a company that certifies the compliance of websites with privacy standards and statements. Nonetheless, The New York Times reports that the Federal Trade Commission is trying to put more responsibility on website operators: Last month, the F.T.C. revised its suggestions for behavioral advertising rules for the industry, proposing, among other measures, that sites disclose when they are participating in behavioral advertising and obtain consumers' permission to do so. One F.T.C. commissioner, Jon Leibowitz, warned that if the industry did not respond, intervention would be next. "Put simply, this could be the last clear chance to show that self-regulation can -- and will -- effectively protect consumers' privacy," [FTC commissioner Jon] Leibowitz said, or else "it will certainly invite legislation by Congress and a more regulatory approach by our commission." Behavioral advertising, which records individual users' Web usage by inserting cookies into their browsers and keeping a log of where they go and what they do, is the most high-profile privacy issue today. Google-owned DoubleClick is tracks Web users across many sites, combining them into one profile at DoubleClick's end to be used for ad targeting. Some survey respondents use cookie-deleting browsers and anonymizing software to thwart tracking systems. Privacy advocates, TRUSTe, and the FTC all strongly encourage companies to post meticulous privacy statements for online visitors, and to follow them to the letter. Still, only 15 percent of TRUSTe's survey respondents said they actually read privacy statements.

Online advertising firm Phorm is pressing ahead with plans to launch more than a year after it first drew criticism from some privacy advocates. Phorm executives will meet with members of the public on Tuesday, following a similar meeting in 2008. The service has proved controversial for some campaigners who believe it breaks UK data interception laws. The firm received clearance from the Home Office and police closed a file on BT trials of the technology. "We have been supported or endorsed by all of the leading stakeholders," Phorm chief executive Kent Ertugrul told BBC News. "Ofcom, the Information Commissioner's Office, the Home Office, leading privacy advocates like Simon Davies, the advertising industry and publishers have all backed our service," he said. He added: "We are very, very happy with where we are one year on." Trawling websites Phorm's system works by "trawling" websites visited by users whose ISPs have signed up to the service and for whom the technology is switched on, and then matches keywords from the content of the page to an anonymous profile. Users are then targeted with adverts that are more tailored to their interests on partner websites that have signed up to Phorm's technology.

Big Brother may be at it again. Behavioral advertising -- the tracking of consumer's Internet surfing activity to create tailored ads -- has triggered an intense legal controversy that has law firms scrambling to stay on top of a burgeoning practice. Attorneys say that behavioral advertising is raising privacy, litigation and regulation fears among consumer advocates, the electronic commerce and advertising industries and legislators. Law firms are busy helping companies come up with a transparent way of letting consumers know that their online activities are being tracked and possibly shared. "Lawmakers and companies are having a tough time keeping up with this new frontier of Internet privacy issues, and there is growing consumer unrest about behavioral advertising, leading in some cases to consumer rebellion," said Lisa Sotto, a partner and head of the privacy and security data group in the New York office of Richmond, Va.-based Hunton & Williams. "Consumers find this type of tracking intrusive, and businesses are starting to take the consumer reaction seriously," she said. The buzz over behavioral advertising has been building since congressional hearings that were held last year, during which Congress called on Internet service providers (ISPs) to testify about a highly controversial advertising practice known as "deep-packet inspection." The practice gives companies the ability to track every Web site consumers visit and provides a detailed look at everything they're doing, such as where they're going on vacation, who is going, how much they spent on the trip and what credit card was used. But then came the first class action targeting behavioral advertising, filed against Foster City, Calif.-based NebuAd Inc., an online advertising company accused of spying on consumers from several states and allegedly violating their privacy and computer security rights. The lawsuit specifically alleges that NebuAd engaged in deep-packet inspection. Valentine v. Ne

Following complaints from Republicans, the White House has shut down a two-week-old e-mail tip line launched to take reports from citizens of "disinformation about health insurance reform." "An ironic development is that the launch of an online program meant to provide facts about health insurance reform has itself become the target of fear-mongering and online rumors that are the tactics of choice for the defenders of the status quo," wrote White House new media director Macon Phillips in announcing the change. "The White House takes online privacy very seriously," he added. The e-mail tip line, flag@whitehouse.gov, was launched Aug. 4 as part of the White House's Health Insurance Reform Reality Check effort, a campaign-style rapid-response effort reminiscent of the war room Obama for America launched in the summer of 2008 to fight online rumors about the then-senator's patriotism and religion. But coming from the head of state, rather than a political candidate, the new effort quickly sparked concern among Republicans about the propriety of government collecting information on private citizens' political speech.

U.S. lawmakers plan to introduce privacy legislation that would limit how Internet service providers can track their users, despite reports that no U.S. ISPs are using such technologies except for legitimate security reasons. Representative Rick Boucher, a Virginia Democrat, and three privacy experts urged lawmakers Thursday at a hearing before the House Energy Commerce subcommittee to pass comprehensive online privacy legislation in the coming months. Advocates of new legislation focused mainly on so-called deep packet inspection (DPI), a form of filtering that network operators can use to examine the content of packets as they travel across the Internet. While DPI can be used to filter spam and identify criminals, the technology raises serious privacy concerns, Boucher said. "Its privacy-intrusion potential is nothing short of frightening," he added. "The thought that a network operator could track a user's every move on the Internet, record the details of every search and read every e-mail ... is alarming."

The recent U.S. stimulus bill includes $18 billion to catapult the health industry toward the world of electronic health records. This is sure to light a fire under every hungry security vendor to position itself as the essential product or service necessary to achieve HIPAA compliance. It should also motivate healthcare IT professionals to learn where their sensitive data is located and how it flows. To be sure, with federal money allocated through 2014 for the task of modernizing the healthcare industry there will be many consultant and vendor businesses that will thrive on stimulus money. Healthcare is unique in that storage of electronic health records is highly distributed between primary care physicians, specialist doctors, hospitals, and insurance/HMO organizations. Information has to be efficiently shared among these entities with great sensitivity towards patient privacy and legitimate claims processing. Patients want to prevent over zealous employers from performing unauthorized background checks on medical history; claim processors want to prevent paying fraudulent claims arising from targeted patient identity theft. The bill has two provisions which turn this into a tremendously challenging plan, and a daunting task for securing patient data: * Citizens will have the right to monitor and control use of their own health data. This implies a large centralized identity and access control service, or perhaps a federated network of patient registration directories. Authenticated users will be able to reach into the network of health databases audit use of their data and payment history. * Health organizations suffering loss of more than 500 patient records must publicly disclose the breach, starting with postings on the government's Health and Human Services website. This allows related organizations to trace the impact of the breach throughout the healthcare network, but care must be taken not to disclose vulnerabilities in the system to intruders

The Federal Trade Commission, continuing its focus on behavioral advertising practices and online consumer privacy, has hired Harvard researcher Christopher Soghoian as a technical consultant. Soghoian, currently with Harvard's Berkman Center for Internet & Society and a noted researcher and blogger on online privacy, will work with the FTC's Bureau of Consumer Protection, Division of Privacy and Identity Protection. He has been particularly critical about the length of time major Internet service providers and companies keep and use customer data Last month, several marketing and advertising industry associations, including the Direct Marketing Association and the American Association of Advertising Agencies, issued self-regulatory principles to govern the online practices of their members, in an attempt to stave off federal regulation of behaviorally targeted advertising.

"U.S. marketers and consumer advocates are preparing for battle over the rules governing online advertising tailored to individual browsing habits, often tracked and collected without notice or permission. The U.S. Congress is due to intervene in the issue in the coming weeks, with a bill in the House of Representatives that would oblige websites to state explicitly how they use the information and allow those using the site to opt out. A billion-dollar industry and consumer privacy are at stake."

For all the concern and uproar over online privacy, marketers and data companies have always known much more about consumers' offline lives, like income, credit score, home ownership, even what car they drive and whether they have a hunting license. Recently, some of these companies have started connecting this mountain of information to consumers' browsers.