Advertising, Marketing & Privacy Law Practice

The Federal Trade Commission recently settled with ScanScout, a video advertising network that serves targeted advertising through the use of online behavioral advertising methods.  According to the FTC, ScanScout utilized Flash cookies to collect and store user data rather than using traditional HTTP cookies. Unlike HTTP cookies, consumers cannot control Flash cookies through their computer browser's and changing browser settings to delete or block cookies do not affect Flash cookies. The FTC alleged that ScanScout's privacy policy contained a general statement that consumers could opt-out of receiving cookies by changing your browser setting to prevent the receipt of cookies, which was false or misleading with respect to ScanScout's use of Flash cookies. The settlement consent order requires ScanScout to disclose on their websites and advertisements, that they collect information through Flash cookies and directly link consumers to the mechanism allowing them to opt-out of targeted advertisements, and such opt-out would remain in effect for at least five years unless the user opts-in again.

TIP: Flash cookies use different technology than traditional HTTP cookies. If using Flash cookies to collect and store user information, at a minimum, advertisers should ensure that their privacy policy clearly discloses that Flash cookies are used and provide specific directions to the user about how to disable and delete Flash cookies. In light of recent class actions against companies utilizing Flash cookies, advertisers may wish to assess whether to use Flash cookies in lieu of HTTP cookies.