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Privacy advocates write Web bug rules

A privacy group issues a new set of industry guidelines to regulate the use of invisible technology that keeps tabs on Web site visitors.

A privacy group today issued a new set of industry guidelines to regulate the use of invisible technology that keeps tabs on Web site visitors.

The Privacy Foundation, a nonprofit privacy group based in Denver, is proposing that Internet advertising companies and Web sites disclose the use of "Web bugs" wherever they are found online. Web bugs, or clear GIFs, are tiny images embedded in a Web page or HTML-enhanced email that transmit information to a remote computer when the page is viewed.

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

Most Web sites do not disclose the use of Web bugs in their privacy policies, according to the Privacy Foundation.

Introducing regulations for such technology could help assuage consumer fears about data collection and profiling practices on the Web--a flash point for government regulators, privacy advocates and industry trade groups. The use of Web bugs has caused considerable trouble for the government and several Web companies.

Microsoft was hit with complaints two weeks ago that documents created with Microsoft Word could be linked with electronic surveillance tags allowing document authors to track their use.

Last month, online toy retailer came under fire for using Web bugs to send personal information about site visitors to a third-party marketing agency. The company, which had not disclosed the practice on its Web site, has been hit with lawsuits stemming from the practice.

Also this summer, the White House ordered its drug policy office to stop using Web bugs on the government's anti-drug site, Freevibe.

Such high-profile exposure for a stealth technology highlights the sensitivity toward monitoring practices on the Web. As a result, companies such as, Microsoft and American Express have introduced new privacy initiatives to calm consumers and buff their images.

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The Privacy Foundation is presenting its guidelines today at the Global Privacy Summit in Washington, D.C. Rules for the technology include:

• A Web page that uses a Web bug must display a clearly visible icon on the page.

• The icon should include the name of the company collecting information from technology and be labeled as a tracking device.

• The Web bug should be linked to a page disclosing what data is collected, how it's used, and which companies receive the data.

• Web visitors must be able to opt out of data collection by Web bugs.

• Web bugs should not be used to collect sensitive information related to children, medical issues, finances, employment or sex.

The Privacy Foundation last week sent the guidelines to several major online advertising companies, email marketers and the Federal Trade Commission for review.

"Following these five guidelines would go a long way to ensuring that consumers are treated fairly and not tracked without their permission," said Richard Smith, developer of the guidelines and chief technology officer of the foundation.

The jury is still out on whether major advertisers and marketers will implement the guidelines.

"DoubleClick has been working with a number of advertisers to implement better disclosure of clear GIFs and is considering adopting some of the recommendations in this report," said Jules Polonetsky, chief privacy officer at the Internet ad company.