FAQ's About the NAI Code
How does the NAI Code of Conduct work?
The Network Advertising Initiative’s Code of Conduct is a set of self-regulatory principles that help guide NAI members’ approach to privacy and data governance in connection with the collection and use of data for Interest-Based Advertising (IBA). NAI members include ad networks, exchanges, platforms, creative optimization firms, yield optimization firms, sharing utilities and other technology providers.
NAI member companies generally collect data for Interest-Based Advertising that is not customarily regarded to be personally identifiable information (PII) and is not defined as such in the NAI Code. Nevertheless, the Code requires NAI members to provide notice and choice with respect to the data collected and utilized to offer Interest-Based Advertising. The Code also limits the types of data that member companies can use for Interest Based Advertising purposes, and imposes a host of substantive restrictions on member companies' collection, use, and transfer of data used for Interest-Based Advertising.
What version of the NAI Code will be in effect in 2020?
The 2020 Code of Conduct is effective as of January 1, 2020.
The Update to the 2015 Code of Conduct was effective from June 1, 2015 to December 31, 2017, and the 2018 Code was effective from January 1, 2018 to December 31, 2019. The 2015 Update to the NAI Mobile Application Code was effective from January 1, 2016 to December 31, 2017. For more information, please see the history of the NAI Code revisions.
Does the Code cover business practices on mobile devices?
In 2015, the NAI began enforcement of the 2015 Update to the Code of Conduct, which addressed member company practices on mobile device web browsers. The NAI began enforcement of the 2015 Update to the Mobile Application Code, which addresses the collection and use of data on mobile applications for Tailored Advertising purposes in 2016.
In 2017, the NAI combined the 2015 Update to the Code of Conduct with the 2015 Update to the Mobile Application Code, merging those two documents into the 2018 Code of Conduct. It went into enforcement on January 1, 2018.
In a major Code revision for 2020, the NAI streamlined these prior Code updates for the 2020 Code of Conduct. The Code expanded the definition of Tailored Advertising to include Audience-Matched Advertising, it incorporated the Guidance for NAI Members: Viewed Content Advertising, and it now requires Opt-In Consent for additional uses of Sensitive Information and Precise Location Information among others. The 2020 Code went into enforcement on January 1, 2020.
What is the purpose of the commentary to the Code?
The commentary to the NAI Code of Conduct was added for two principal reasons: 1) to provide additional information to explain the intent of the Code, and 2) to offer non-binding, illustrative guidance on ways to comply with the NAI Code. Information in the commentary is not intended to be either exhaustive or exclusive. In fact, this is made clear in the Code Commentary section, which states:
The purpose of the commentary is not to add substantive obligations on member companies or to alter the principles set forth in the Code itself. Instead, the commentary’s purpose is to explain the intent behind certain provisions of the Code. The commentary is also intended to provide examples of possible measures member companies may take to meet the substantive obligations of the Code.
We recognize that members hear conflicting views from regulators and privacy advocates on what to include in privacy policies. On the one hand, a common criticism we hear from regulators and advocates is that privacy policies are too long and detailed, too “legalistic,” and that consumers don’t read them. On the other hand, regulators, advocates and class action lawyers have filed complaints, enforcement actions or lawsuits charging that privacy policies lack adequate detail. This creates an obvious Catch-22 for industry. As data collection becomes more complex, finding a way to balance the pressure for more and more detailed disclosures with countervailing pressures for simplified privacy statements is an increasing challenge.
The Commentary also suggests that members should describe their data collection and use practices in as clear and concise a manner as possible, and to disclose technologies used for Interest-Based Advertising and Ad Delivery and Reporting. However, NAI recognizes that it is important to strike the balance between conciseness and thoroughness.
There are already new developments that are not covered in the NAI Code. Doesn’t this create a major gap in your program?
Technological changes involving digital activities are occurring at a dizzying rate. One of the strengths of self-regulation is that our system is nimble and flexible, and allows us to respond more quickly than regulation or legislation to those changes through our code update process. This involves a constant evaluation of changes, consideration by our Board and members of how our principles should be applied to new technologies, new uses and new situations, and also allows us to tap into our members’ expertise in developing possible updates. Our ability to consider member input that reflects application of general principles, as well as practical operational considerations, is what allows our Code to enjoy such strong support from members. Where there are evolving developments, we need time to gain some practical experience to be sure that we making the right sort of recommendations when we update the Code.
When was the NAI Code last revised?
The NAI's Self-Regulatory Code of Conduct was last updated in 2019, in the form of the 2020 Code of Conduct.
For this revision, NAI staff worked with board members, and member companies, along with feedback from industry experts to update the Code in order to remain current with the constantly changing advertising ecosystem. This revision incorporates Guidance for NAI Members: Viewed Content Advertising which expands the NAI’s scope to Tailored Advertising on televisions. It also revises some terminology to reflect changes in technology, adds definitions, expands its scope to incorporate the use of user-level offline data for targeted advertising across websites and applications, and it expands Opt-In Consent requirements across various uses.
Prior to this latest significant revision for the 2020 Code, the Code was revised in 2008, and 2013 after its initial adoption in 2000. The Code is regularly reviewed in an effort to anticipate and respond to practical questions, technical and business process changes in our industry, and new issues raised by policymakers and advocates. These reviews resulted in non-material updates to the Code in 2015 and 2017.
The 2018 Code update combined the Code of Conduct for web-based data collection and use with separate Code of Conduct for mobile app-based data collection and use. This update also incorporated references to separate NAI Guidance documents, including Cross-Device Linking as well as revised some terminology to reflect changes in technology. This revision did not introduce any material changes or create any new obligations for NAI members. The Code was also updated in 2015 to clarify that the practice of Retargeting currently carries the same obligations and requirements under the Code as Interest-Based Advertising (IBA). In addition, the 2015 update explained that members' "Interest-Based Advertising" activities based on sensitive health conditions or treatments require "Opt-In Consent." Although these interpretations were previously discussed in the commentary to the 2013 Code of Conduct, they were moved directly into the text of the Code in the 2015 update for additional clarity and emphasis that NAI staff views them as Code requirements.
A prior material revision to the Code, completed in 2013, was the result of the convening of a Code Revision Working Group in February 2012. The Working Group was composed of dozens of NAI member companies who held numerous meetings over several months. The Working Group, the NAI Board of Directors and NAI staff members evaluated and discussed the current advertising ecosystem and various, proposed updates to the Code. From that work, the NAI developed an updated draft Code of Conduct that was put out for public comment in March 2013. Both prior to publishing the draft and during the comment period, NAI staff solicited and received feedback and comments from the NAI's diverse membership. The 2013 NAI Code was formally approved by the NAI Board of Directors and announced at the NAI Summit in May 2013.
Who can enforce the NAI Code?
The NAI Code is a self-regulatory code. Only the NAI staff is authorized to interpret the requirements of the NAI Code and to enforce the NAI Code. Where NAI staff determines that there is an instance of non-compliance with the Code by a member, and a member refuses to implement the recommended steps to bring its practices into compliance, the NAI enforcement procedures allow NAI to refer the matter to the Federal Trade Commission (FTC). The referral is based on a theory that the member committed to adhere to the requirements of the NAI Code and failed to do so. In making such a referral, NAI does not ask the FTC to interpret its Code, but simply to address the member’s failure to comply with NAI’s interpretation and application of the NAI Code.