Silicon Valley startup company NebuAd Inc. is expected to fall under the most scrutiny for its dealings with Internet service providers. NeBuAd Inc. has received vast criticisms from privacy advocates in recent weeks over tracking online customer behavior and targeting banner ads based on the information.
NebuAd's business model raises a myriad of concerns as an earlier generation of "adware" companies, according to Ari Schwartz, vice president of the Center for Democracy and Technology, a civil liberties group.
Several NebuAd executives were once employed by Gator Corp., an adware company that later renamed itself Claria Corp.
The Redwood City-based company's difference lies in how it works directly with Internet service providers to examine their customers' Web surfing practices, then deliver ads targeted at their interests.
By injecting its monitoring in between consumers and the websites they visit, NebuAd's technology could violate a 1986 federal wiretapping law that requires at least one party to a communication to
consent to a wiretap, according to an analysis released Tuesday by the Center for Democracy and Technology.
"This is analogous to AT&T listening to your phone calls all day in order to figure out what to sell you in the middle of dinner," said Robert Topolski, a technology consultant to Public Knowledge and Free Press, two other public interest groups that have raised concerns about NebuAd.
Currently no major Internet service providers have partnered with NebuAd.
NebuAd has noted that it does not gather personally identifiable information surrounding consumers. The company also requires Internet service providers to inform their subscribers about the advertising system. Nevertheless, the company launched a new series of privacy protections, such as an online notification system and an opt-out mechanism.
"NebuAd is committed to driving innovation in online advertising while pioneering industry-leading privacy practices," NebuAd chief executive Bob Dykes said in a statement.
Additionally, the committee plans to investigate the need for general, firmer online privacy protection.