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Privacy advocates target Abacus shareholders

Advocates send a scathing letter to Abacus Direct shareholders asking them to derail the $1 billion proposed merger between the market researcher and Internet advertising firm DoubleClick.

Consumer advocates sent a scathing letter to Abacus Direct shareholders today asking them to derail the $1 billion proposed merger between the market researcher and Internet advertising firm DoubleClick on grounds that it could violate international privacy protection laws.

The companies trumped the deal as the key to targeting potential customers more efficiently online and off. But consumer watchdogs are fighting DoubleClick's acquisition, charging that the deal would create an unprecedented database of personal information without consumers' prior consent.

Through various techniques, the advertising network plans to correlate the names and addresses of Net shoppers with the Abacus Alliance database of consumer buying habits, made up of more than 2 billion consumer catalog transactions, according to the companies.

In a letter to Abacus shareholders today, consumer advocates questioned whether the companies understood the privacy implications of the proposed merger, or whether they had considered international laws that could prohibit their data exchanges.

"We believe disapproving the merger is the right choice both on public policy grounds and in terms of your best economic interests," the letter states.

DoubleClick wouldn't comment directly about the letter, and Abacus couldn't immediately be reached for comment.

"DoubleClick and Abacus have both been leaders in privacy issues, and we both offer consumers an opt-out policy and plan to do so moving forward," a spokeswoman for DoubleClick said today.

Data collection has become the cornerstone of a contentious international policy debate that is closely tied to the growing e-commerce sector, where consumers forfeit sensitive data in return for goods and services and in which marketers are taking bolder steps to track online users so they can analyze which sales are closing and which fall through.

Consumer groups want Abacus shareholders to understand the murky waters they are treading into when it comes to privacy.

Specifically, the letter points to a European Union privacy directive that bars data transfers from its members to countries or companies that it believes don't adequately protect personal data or fail to get proper consent before sharing it.

The groups say they also are drafting a petition to the Federal Trade Commission to block the merger; in the letter today they threatened to take legal action in Europe against the companies.

"DoubleClick's practices are more likely not in accordance with laws in many European countries that limit nonconsensual data collection," the letter continues. "Privacy International, a human rights organization based in London, now regards DoubleClick as an outstanding choice for its planned actions to enjoin illegal trans-Atlantic data flows."

Advocates also could leverage the EU data directive against the merger because Abacus has a subsidiary in Teddington, England. Foes could argue that the U.K. arm of the company shouldn't be able to exchange data with companies in the DoubleClick network--as well as Abacus's U.S. locations--that don't comply with the EU law.

DoubleClick has said it is willing to sit down with privacy advocates to discuss their concerns, but that it is unlikely the new venture will force its collective members to get prior permission from consumers before exchanging addresses and matching up their offline and online shopping habits. Instead, both companies have disclosure policies regarding what they do with data once it is collected and say they will continue to let consumers opt out of their databases.

But privacy groups want DoubleClick's network of more than 1,300 Web sites to get prior permission before gathering consumers' data through e-commerce transactions or cookies and then matching them with Abacus's 1,100 merchandise catalog companies.

"Otherwise, when you're at an e-commerce site and start looking around at sweaters, the information that you're shopping online could then be instantly shared with the other DoubleClick and Abacus partners," said Jason Catlett, founder of Junkbusters, a clearinghouse for privacy-protection measures. "There are huge privacy impediments to that."