2 Hired to Calm Fears for Web Privacy

March 8, 2000

2 Hired to Calm Fears for Web Privacy

Internet Ad Placement Company Appoints Consumer Advocates
By ERIC LIPTON

oubleClick, the Internet's largest advertisement placement company, has hired two of New York's most prominent consumer advocates in an effort to reassure the public, investors and federal and state regulators that it will respect computer users' privacy rights.

Librado Romero/The New York Times
Robert Abrams, former attorney general, is joining DoubleClick.
Robert Abrams, who served four terms as state attorney general as well as stints as a state Assembly member and Bronx borough president, has been named chairman of the company's new privacy advisory board. Jules Polonetsky, the city's commissioner of consumer affairs and a former state legislator, said yesterday that he was leaving the Giuliani administration in two weeks to take over as DoubleClick's chief privacy officer.

The two join another recent recruit from the political world, Josh Isay, the former chief of staff and campaign manager for Senator Charles E. Schumer. In January, Mr. Isay took over as DoubleClick's Washington and New York lobbyist. Mr. Abrams and Mr. Polonetsky will be assigned to formulate corporate privacy policies as the Federal Trade Commission and attorneys general in Michigan and New York State investigate how the New York City-based company uses consumer data to decide where to place online advertising.
"The challenge is how can businesses continue to expand on the Internet and still protect consumer rights," Mr. Abrams said yesterday.
The appointments of Mr. Abrams and Mr. Polonetsky, whose compensation the company would not disclose, comes a week after DoubleClick announced that it would delay a plan to merge a vast database it recently acquired containing names, addresses and off-line buying habits of millions of consumers with information it anonymously assembles each day about Internet users as they visit Web sites.
DoubleClick started with two employees four years ago, but today employs 1,800 people in 22 countries who place advertisements on a network of 1,500 Internet sites and share data with them, including some of the most popular online addresses, such as Travelocity and AltaVista. It also places ads on more than 11,000 other sites, including The New York Times on the Web, that are not part of the DoubleClick network but use the company technology to send banner ads to their Web pages. The company's sales last year were $315 million, and its stock closed yesterday at 96.1875, up 4.6875, but down over all since the end of last year by 24 percent.
The intent is to take an old form of advertising -- direct marketing -- into the Internet world, by directing ads to consumers who have already shown a potential interest in buying certain products through their previous Internet use. The company notes that Internet users have the right to request that any Internet visits or personal data not be collected. But privacy advocates say the notice is inadequate, and they fear that despite DoubleClick's assurances to the contrary, it routinely records information as detailed as what video movies or plane tickets a consumer buys, as well as information about health and even phrases typed into search engines.
A coalition of consumer groups and civil liberties advocates have filed complaints in recent months with the Federal Trade Commission, asking it to investigate the company's data-collection practices. And last month, Attorney General Jennifer M. Granholm of Michigan announced that she intended to sue the company, which she said was essentially putting a "bar code" on a consumer's back.
"This amounts to little more than a secret cyberwiretap," Ms. Granholm said in announcing her investigation. The New York State attorney general's office is also conducting an investigation.
Mr. Polonetsky, 34, a lawyer who has served as commissioner of consumer affairs for two years, said yesterday that he would work with federal and state regulators, industry officials and privacy advocates to try to draft Internet privacy regulations or voluntary guidelines. He also said he would monitor the company's adherence to these standards.

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Mr. Abrams, 64, who will retain his position as a partner at the New York law firm Stroock & Stroock & Lavan, will serve a similar role, helping to pick members for and then overseeing a new board charged with assuring that DoubleClick is honoring its commitments to consumer privacy. The company also is hiring PricewaterhouseCoopers to audit its use of consumer data.
Mr. Polonetsky and Mr. Abrams said in separate interviews yesterday that they were confident DoubleClick and its executives were committed to addressing the privacy concerns, in part because such a move is essential to the success of the new advertising medium.
Deirdre K. Mulligan, staff counsel at the Washington-based Center for Democracy and Technology, said she was pleased that DoubleClick was appointing executives to address consumers' privacy concerns, but she added that it remained to be seen how serious the company's commitment is.
"If this is only window dressing, it is not adequate," she said, noting that her organization believed that it was likely that federal legislation would still be needed to govern how such vast loads of consumer data can be used.
DoubleClick's president, Kevin Ryan, said yesterday that the Internet community and users would gradually understand that the company was committed to respecting consumers' privacy over the long term. "People will see over time what we do," Mr. Ryan said. "The appointments of Abrams and Jules are two steps along the way."

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