Activists Assail 'Web Bugs'

Internet advertising companies and Web sites should disclose their placement of "Web bugs" to ease users' concerns that their online moves may be unknowingly tracked, according to a new proposal presented on Wednesday by the Privacy Foundation.

The nonprofit watchdog group said at the Global Privacy Summit in Washington, D.C. that its set of regulatory guidelines for the online ad industry would help keep tabs on the invisible technology. Web bugs, or clear GIFs, are images that are intentionally embedded in the software code of Web pages or HTML-enhanced commercial e-mails in order to transmit information to a remote computer when the page is viewed.

Web bugs not only count the number of times a particular page has been viewed, but they also play a key role in forming online profiles. For instance, the stealth technology can transfer demographic data about visitors of a site to Internet marketing companies. This information can then be combined with offline demographic data such as household income, the number of family members, and existing mortgage balances.

"They are designed to monitor who is reading, yet most people have no idea they exist," said Privacy Foundation executive director Stephen Keating. "Our proposal is simple: make Web bugs visible."

Five-Part Plan

The Privacy Foundation's five-pronged calls for:

Sites that use Web bugs to employ a visible, easily spotted icon on the page

Icons to identify the name of the company that is harvesting data

Users to be able to click on the icon and link to a page disclosing what data is being collected, how the information is being used, which companies are receiving the data, and what additional information will be combined with this data

Visitors to the site to be able to opt-out of any data collection by Web bugs

Sites to refrain from using Web bugs to collect sensitive information related to children, medical issues, financial or employment matters, and sex.

"Following these five guidelines would go a long way to ensuring that consumers are treated fairly and not tracked without their permission," said Privacy Foundation chief technology officer Richard M. Smith. Last Friday, the proposal was sent for review to 40 corporate and governmental entities, including major Internet advertising firms, e-mail marketers, and the U.S. Federal Trade Commission (FTC).

Controversy Flares

The controversy over Web bugs has flared in recent months. Toysrus.com came under fire for allegedly using Web bugs to compile personal information about its online shoppers and send that data to an outside marketing agency. According to reports, the company stopped the practice last month.

In a high-profile gaffe this summer, the White House ordered the U.S. Office of National Drug Control Policy to stop using Web bugs on visitors to the site.

At the same time, online privacy has emerged as a major concern among Net users. A report issued last month by the Pew Internet & American Life Project found that 84 percent of Internet users feared businesses and others would get personal information without their knowledge.

The respondents also wanted companies to take a more proactive approach to safeguarding their interests, with 71 percent favoring policies that place the burden of ensuring privacy on Web sites, not on users.