Internet Privacy, Cookies, and Data Mining Practices

Internet Privacy, Cookies, and Data Mining Practices

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     Abstract     Technology has progressed to the point where a user's web usage can be tracked between sessions by almost anyone. Text files dropped on a user's machine, known as cookies, can give certain corporations personal information about the user, and can even keep track of what sites the user has visited. Such personal information can subsequently be sold or exploited, jeopardizing the user's privacy.

            In recent years and months, use of the Internet, specifically the world-wide web, has grown by leaps and bounds. An aspect of web-usage that has become nearly ubiquitous is web-advertising, specifically, banner advertising. However, in recent times, data mining techniques applied to data collected through web advertising have progressed to the point where individual privacy is at risk. The threat of  personally identifiable information being linked to individuals is a clear and present danger and various privacy organizations have filed complaints with the Federal Trade Commission regarding these issues (Federal Trade Commission). This paper is an examination of the privacy issues surrounding web advertising.

Banner advertising should be examined in a different light from static advertising because banner advertising is directed to individual consumers. Although static advertising, which is when an advertisement is coded into a web site, is fairly common, banner advertising is far more common because it allows advertisers the opportunity to both customize advertisements to individual users as well as collect data on those consumers. Web advertising has grown to a level where it has become a $934.3 million industry ( article/0,1401,7561_231431,00.html).  Furthermore, customization has become a very serious priority for advertisers (and content-producers in general) as repeat business now comprises more than half of all e-business transactions ( article/0,1401,7561_231431,00.html).

In addition to customization, the other advantage of banner advertising is that it allows the firms in question to practice data mining techniques that can significantly add to their revenues. "By merging the information gathered from their web site traffic analysis tools with other data sources, such as customer databases, savvy online marketers can mine their web site traffic data to maximize the effectiveness and the return on investment (ROI) of their web sites."  ( The difference between data mining techniques and traditional data extraction techniques is that data mining "extracts information from a database that the user did not know existed" (Thearling), as opposed to traditional data extraction, where the user is rarely surprised by the information gleaned.

            Although these

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Related Searches">practices can provide users with a fair amount of customization, there exist certain risks to individual privacy. According to the Department of Energy's Computer Incident Advisory Capability, "the vulnerability of systems to damage or snooping by using web browser cookies is essentially nonexistent." (Department of Energy) Even so, the privacy of individuals is threatened whenever users are not informed of the usage of their personal information. Individual privacy is further threatened when individuals are not even aware of the information that is being collected about them. Although DoubleClick, which along with AdForce and the Excite@Home coalition comprises 90% of banner advertising in the United States (Electronic Privacy Information Center), claims in its Privacy Policy to remove all personally identifiable information from individual data (, Privacy Policy), enough privacy rights organizations found sufficient cause for concern to file a complaint with the Federal Trade Commision in January 2000 (Federal Trade Commission).

            A problem with the current situation regarding web advertising is that although many firms have policies which allow users to opt out of their data mining practices, they are generally buried in several layers of legal padding. A good example of this is DoubleClick's policy, which allows users to opt out of receiving customized advertisements as well as avoid having their personal information go through their data mining practices (, Opt Out Policy), however, it is difficult to find, and may also prevent several non-related web-services from working. Another technology that is available to users is the use of third-party software which prevents advertisers from pulling information off a user's machine (

            In response to the January 2000 complaint against DoubleClick, the Federal Trade Commission released a report to Congress which recommended the enaction of legislation which limits the extraction of personal information from web-traffic data. (Federal Trade Commission) Currently, the Online Privacy Protection Act of 2001, sponsored by Representative Rodney Frelinghuysen, is under consideration by the House Committee on Energy and Commerce. Similarly, the same committee is also considering the Electronic Privacy Protection Act of 2001. The two bills, if enacted, would require total disclosure of all information that is extracted via electronic means and place limits on data-extraction technologies, respectively (Electronic Privacy Information Center). However, the Network Advertising Initiative, which accounts for 90% of online advertising has agreed to self-regulate and already complies with the provisions of both bills (Network Advertising Initiative Privacy Policy).

            In conclusion, although very few material threats currently exist for users who are subjected to banner advertising on the world-wide web, the implicit attacks on personal privacy that web advertising technology allows are a threat to individual rights. The fact that personally identifiable information on individual consumers exists and can be linked to individuals using data-mining techniques is a highly disturbing development. Although legislation is currently in the works (Electronic Privacy Information Center), there exists no real recourse for consumers other than to understand the technologies used and be careful about their internet usage.


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