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14/04/2016

AZ AdLaw l Behavioral advertising: Chile must adapt to a higher standard

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AZ AdLaw l Behavioral advertising: Chile must adapt to a higher standard

With advances in technology, it has become routine for the advertising industry to monitor and record the behavior of individuals online to better understand their habits and the effectiveness of the publicity. This is especially true with the rise in use of cell phones, through which advertisers may have access to an unprecedented amount of information. This is not limited to knowing whether or not a particular ad has been viewed, but can include personal data such as location, web browsing habits, exercise routines, to name a few.  In this regard, Chile is no exception and consumers in our country are also likely to have their online behavior tracked through different technological measures.

While it is true that our local laws are outdated regarding the use of new tracking technologies and the penalties associated with the breach of the applicable laws are quite low, there are still regulations that must be taken into account when implementing an advertising campaign that incorporates the use of this technology.

All tracking technologies, which could potentially retrieve personal data, need to follow the general rules given by the Data Protection Act (Law No. 19.628) which establishes that the use of personal data is only permissible by prior written consent given by the data subjects, unless an exception applies. Consent given by electronic means, such as online click-wrap terms, is deemed to be compliant with this rule. The most common of these tracking technologies is the use of cookies. This is a digital file that is sent by the server to user’s hard drive and that allows for information about the user’s preferences and browsing patterns to be stored. Unlike other jurisdictions, cookies have not been specifically regulated in Chile. Forewarning the consumer on the use of cookies is not mandatory and seldom used.  Under our current legislation, for part of the doctrine, “personal data” is not collected by using cookies, so there would be no obligation to request expressed and written consent from the user to authorize their use.

In early 2015, the government announced that it would send to Congress a New Data Protection Bill that would update our current legislation to raise the standards of protection, in accordance with other legislations like that of the European Union. If approved, the targeted advertising example previously described is likely to change, as regulations would become more rigorous and sanctions for violations would increase significantly.  However, to date, the bill has been paused due to financing issues.  According to the latest news on this subject, the authorities planned to present the bill to Congress during March of this year, but so far there have been no developments.

Until this new bill is approved, the advertising industry can continue to develop behavioral advertising in Chile with a relatively low regulatory burden. However, it is inevitable that our legislation must follow the global trend and adapt to more rigorous standards. Taking this into consideration, the industry will have to be even more meticulous when using technological measures of monitoring.

To obtain further Information on this subject, please contact:

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Oscar Molina   

Senior Associate

omolina@az.cl