Center for Digital Democracy scrutinizes adCenter serving

In a complaint to be filed today, the Center for Digital Democracy asks for investigation into the Internet industry’s practice of targeting advertisements to Web users based on demographic information and online behavior.

The complaint asserts that companies are deficient in disclosing how they gather and use data about people who visit their sites. It singles out Microsoft Corp.’s advertising system in particular, citing the way the company targets users based on browsing habits and data such as gender, age and location.

Ad targeting works in part by gleaning clues about users from the Microsoft sites they visit. It also uses personal data that people submit when they sign up for programs such as Hotmail and MSN Messenger, which require the use of Microsoft’s log-in systems, Passport and Windows Live ID.

Microsoft claims it infirms users that it may use the personal information it gathers about them to deliver “content and advertising that are customized to your interests and preferences.”

For its part, the Center for Digital Democracy doesn’t believe Microsoft is specific enough about the company’s online advertising practices. Its director assert it’s not enough to merely link to a privacy statement online.

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