Online ad company NebuAd faced mighty questions from U.S. senators on Wednesday. Privacy advocates have complained that the company’s technology is too intrusive and may be breaking laws.

NebuAd is insisting its privacy protections are comprehensive. It plus is offering new tools, such as customer notification and new opt-out technology, to empower Web service providers.

“NebuAd is committed to driving innovation in online advertising while pioneering industry-leading privacy practices,” said NebuAd CEO Bob Dykes.

Does Ad Targeting Break the Law?

Privacy advocates aren’t waiting for the Senate’s conclusions. On Tuesday, the Center for Democracy and Technology (CDT) released an analysis questioning the legal standing of NebuAd’s approach to online advertising that is being considered by ISPs and Web advertising networks.

Under the scheme, an ISP would allow an advertising network to copy the Web traffic streams of subscribers. The ad network would record each subscriber’s online behavior and use it to target ads.

“Based on what we

know so far, that new advertising model appears to defy fair consumer expectations and may violate communications-privacy laws,” said CDT President and CEO Leslie Harris.

The CDT report examines how the practice of copying consumer notes at the ISP level relates to the protections for online communications set out in the Electronic Communications Privacy Act.

CDT’s analysis concludes that the practice may run afoul of federal and state wiretap laws. Federal law would allow the practice with the consent of the subscriber. However, CDT noted, that consent should not be obtained through a notice buried in a “terms of service” agreement or inserted in a billing statement. State laws may be even more stringent, requiring consent from all parties.

“Consumers do not expect their ISP to be copying their Net communications and selling them to third parties,” said CDT Vice President Ari Schwartz. “We have concluded that the advertising-network model at issue…

Orginal post by Top Tech News