DoubleClick Settles States' Probe

DoubleClick ( DLCK) will pay $450,000 to settle a probe by 10 states into the way it handles the data it collects about Web surfers. The company also agreed to various changes to its practices, including a rule that Web sites must tell visitors if DoubleClick is profiling their activities.

The deal is the latest victory for New York State Attorney General Eliot Spitzer, who last week got online payment system PayPal ( PYPL) to stop handling gambling transfers for New Yorkers and who has been central in dislodging perceived conflicts of interest among investment banks.

Spitzer said the DoubleClick probe began in 2000 when the Internet marketing giant said it would begin to offer online advertisers personally identifiable profiles of Web surfers -- a plan it later withdrew when it raised the ire of Internet privacy rights advocates.

After a probe by the Federal Trade Commission was dropped in 2000, DoubleClick last year agreed to pay $1.8 million and modify its information-gathering practices to settle a variety of class-action lawsuits brought at the state and federal level. The current settlement is with 10 states following a two-and-a-half year probe.

"When an online contractor can invisibly track nearly every online consumer, consumers deserve to know the privacy cost of surfing the Web," Spitzer said.

Among other prohibitions, DoubleClick agreed to continue publicly maintaining a privacy policy that its clients are aware of; not to share data collected for one client with other parties; to develop technology that allows an Internet user to see categories associated with his profile, a so-called "cookie viewer"; and to retain an independent firm to verify DoubleClick's compliance with the terms of the settlement.

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