In the Matter of Chitika, Inc.

Citation
In the Matter of Chitika, Inc., a corporation, FTC File No. 1023087 (complaint filed, Mar. 14, 2011) (Complaint); (Agreement containing Consent Order).

Factual Background
Chitika is a network advertiser that engages in online behavioral advertising, the practice of tracking consumers’ activities online in order to serve them targeted advertisements based upon their individual Web browsing activity. Chitika offers an online behavioral advertising service in which it acts as an intermediary between Web site publishers and advertisers that wish to have their advertisements placed on websites. Chitika tracks the searches a consumer has conducted, the websites visited, and the content viewed in order to serve advertising targeted to the individual consumer’s interests. When a consumer visits a Web site within Chitika’s network of Web site publishers, Chitika sets a new cookie or automatically receives a cookie it has previously set in the consumer’s browser (the "Chitika tracking cookie"). Chitika uses cookies to serve advertisements to consumers that are targeted to their interests.

== FTC Complaint

The Commission filed a complaint against Chitkia on March 14, 2011. The complaint alleged that representations Chitika made in its privacy policy regarding consumers’ ability to opt out of receiving tracking cookies were false or misleading. Chitika’s privacy policy stated that consumers could opt out of receiving Chitika cookies. For those consumers who elected to opt out, Chitika set an "opt-out cookie" in the consumer’s browser so that no additional cookies would be set in the consumer’s browser, no additional information would be added to a previously set Chitika tracking cookie, and the data previously placed in the cookie would no longer be used to target advertisements to the consumer.

From at least May 2008 to February 28, 2010, however, Chitika delivered opt-out cookies that were set to expire after ten (10) days. Accordingly, the complaint alleges that Chitika deceived consumers and violated Section 5 of the FTC Act by making an unqualified claim that consumers could opt out of targeted advertising when the opt out expired in ten (10) days.