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Compliance Report Shows Continued Commitment to High Standards by NAI Members

NAI is pleased to release our sixth Annual Compliance Report today, providing a summary of the findings from our compliance monitoring processes during the 2014 compliance period (January 1, 2014 to December 31, 2014).

As NAI Counsel and Director of Compliance, I am proud of this comprehensive Report and of the time and effort invested in it by our staff and by representatives of our member companies.

The 2014 report marks the largest Annual Review conducted by NAI, and the first one to evaluate compliance with the updated 2013 NAI Code of Conduct, which went into effect in January 2014.

This year’s Compliance Report shows that NAI members continue to demonstrate a commitment to the high standards set out in NAI’s Code. The Report is evidence that self-regulation can and does work, and its publication is important because it allows consumers and regulators to evaluate NAI’s compliance program and self-regulatory process for themselves.

As the Report explains in much greater detail, the NAI staff monitors compliance with the Code throughout the year and works with members on an ongoing basis to ensure compliance, even as their business models and technologies evolve. For example, we engage in automated technical monitoring of our member companies Opt-Out Mechanisms. Last year, we also added monitoring tools to automatically flag changes to member companies’ privacy disclosures. These efforts are in addition to interviews with high-level executives at those companies, individual assessments of extensive questionnaires, and manual reviews of contract samples, public-facing statements, and non-public marketing materials. Not only does this extensive process allow us gauge overall member compliance with the Code, it also helps NAI gain unparalleled insight into the state of our industry.

Some key highlights of the Report include:

  • Technical Monitoring:
    • NAI made continuous improvements to our automated monitoring capabilities.
    • We launched a new Privacy Disclosures Scanner in 2014.
    • Our staff manually examined over 600 member cookies for lifespan and behavior.
       
  • Consumer Communications:
    • NAI reviewed nearly 9000 consumer queries received via email, postal mail, or telephone.
       
  • Education:
    • Members donated over 5.5 billion impressions to the NAI educational campaign, nearly tripling last year’s contributions. o This additional exposure led to over 4.5 million page views of the NAI’s educational material, 1.5 million more than last year.
       
  • Choice:
    • Over 5 million visits to the NAI Opt-Out page, over a million more than in 2013.

Through our rigorous compliance review process, NAI found that members are upholding their commitments to NAI’s high standards. That does not mean that we did not find any potential violations of the Code. We did not find any material violations of the Code during the 2014 compliance review period. NAI staff worked with many member companies to spot and resolve potential issues early, before they could affect a large number of consumers, or otherwise necessitate sanctions or enforcement procedures. For instance, we found that some member companies had minor issues such as broken opt out links in their privacy policies or elsewhere on their sites. However, in all of these cases, members had provided consumers with an alternative mechanism for consumers to opt out, such as a link to the NAI opt out page. In the end, whenever these issues were discovered, they were found to be unintentional, were resolved quickly, and affected a limited number of consumers.

I should note that NAI of course retains the option to sanction members if Code violations are found to be material; however, we have found that maintaining dialogue and communication with member companies on an ongoing basis helps resolve issues quickly, to the benefit of the consumer and the overall health of the ecosystem.

At NAI, we often say that self-regulation only works when high standards are backed by a true commitment to accountability and a rigorous enforcement procedure. This Report serves as evidence that self-regulation can and does work. NAI will leverage the findings of the Report to further strengthen our strong self-regulatory program.