Will Pay Per Click Companies Be Forced To Drop Cookies?

Writing by Pay Per Click Journal on Thursday, March 20, 2008 Leave a comment

Here’s an interesting piece of proposed legislation:

AFTER reading about how Internet companies like Google, Microsoft and Yahoo collect information about people online and use it for targeted advertising, one New York assemblyman said there ought to be a law.

So he drafted a bill, now gathering support in Albany, that would make it a crime — punishable by a fine to be determined — for certain Web companies to use personal information about consumers for advertising without their consent.

And because it would be extraordinarily difficult for the companies that collect such data to adhere to stricter rules for people in New York alone, these companies would probably have to adjust their rules everywhere, effectively turning the New York legislation into national law.

I knew it was coming. It was just a matter of time. If this law passes it will mean that companies like Google, Yahoo!, and Microsoft, which use cookies to collect data on surfers that they then share with advertisers, or use to show targeted advertising to in the SERPs, would have to police their own practices or be hit with fines. But will the law pass?

According to Greg Sterling at Screenwerk, even if it did it wouldn’t stand up in court against the Constitution:

From a legal standpoint this law wouldn’t survive a court challenge because, assuming it passed, it would violate the Commerce Clause of the US Constitution, which doesn’t allow individual states to regulate “interstate commerce.”

But I think Sterling is missing a key point here. If the law passes it wouldn’t necessarily apply to any state other than New York. Depending on how the law is worded, it would only be enforceable in New York and by New York courts. That doesn’t have anything to do with interstate commerce nor with the Commerce Clause as long as it is used to apply to cases where people viewing ads are located in New York and the ads being shown are from businesses that also exist within New York. That would pretty much render the law ineffective.

Imagine that Google shows an ad to a resident of Albany, New York. The searchers queries “dole bananas.” A Pay Per Click ad for a Shopping.com, a company located in California, is the only ad on the SERP. And since Google is also headquartered in California, the New York law would not apply because New York legislators cannot, as Sterling pointed out, regulate interstate commerce, which they would effectively be doing if they tried to apply the law to Google and Shopping.com. Ergo, the law would be totally ineffective.

But suppose a person in Albany, New York searched for “Albany auto sales”. Now they get an ad for AutoSite.com, located in New York. If AutoSite benefits from information collected by Google for the purpose of targeting advertising to residents of Albany, New York then there might be a problem. But I’d say that even then it is suspect if Google collects the information. If Google, a California company, collects information on consumers and uses it to show ads that New York companies benefit from then those New York companies can argue that they have no control over information Google collects, why they collect it, or how. Again, the law would have no teeth.

I don’t see such a law gaining any kind of ground at any state level. States have tried to impose legislation on e-commerce before and it seldom has any impact. I wouldn’t be too worried about this unless the Feds decide to impose legislation. So far, we’ve been lucky enough to keep the hands of Congress out of e-commerce.

Leave a comment                      Category: PPC Management                      

Read similar posts in PPC Management

• Mother's Day Optimization For PPC
• How To Organize Your PPC Campaigns
• Is Click Fraud Getting Lower?
• How Does 24% Equate To Effective PPC?
• The Best Keyword Trick In The Book

Subscribe to our RSS feed

No comments yet.