The online industry has been told repeatedly over the years that if they didn’t create a coherent policy protecting user privacy themselves, the federal government would make the policy for them. After years of dithering, the final straw appears to have made contact with the camel, as the Federal Trade Commission and various state agencies stepped in last week to inquire as to what exactly DoubleClick and Alexa think they’re doing with Web surfers’ personal information.

Alexa Internet, a division of Amazon and the power behind that site’s zBubbles shopping add-on, has been accused in two civil lawsuits (both of which seek class-action status) of collecting far more information than they admit to and of passing that information on to third parties (and Amazon). If the allegations were true, Alexa would be in violation of both the Electronic Communications Privacy Act and the Computer Fraud and Abuse Act, not to mention Amazon’s stated privacy policies. Amazon spokespeople deny everything.

New York-based DoubleClick, meanwhile, also faces FTC scrutiny for their ability to cross-reference information on individual surfers’ habits with their recently acquired Abacus Online database of name and address information, demographic data, and shopping history (retail, catalog, and online). In addition, attorneys general in states including New York and Michigan are conducting informal inquiries into DoubleClick’s collection practices, similar to the scrutiny Alexa is undergoing.

Many observers consider the DoubleClick investigation more significant in potential impact—in contrast to Alexa, which the user chooses to load and use (however ill-informed they may be about the consequences), the average user doesn’t do anything to end up in DoubleClick’s database. (Entering information in the Abacus database is voluntary, though much of it is gathered through order and registration forms by sites that may be less than clear about the destination of the data.)

DoubleClick has responded to the inquiry with an aggressive “Internet Privacy Education Campaign,” claiming, among other things, that enabling user-targeted advertising keeps the Net free for consumer use. (This theory, of course, presupposes that anyone is looking at those ads. Surveys show that consumers are generally ignoring ads, leading observers to wonder exactly who DoubleClick is trying to convince.) More substantially, the company has also announced that PricewaterhouseCoopers will be conducting audits of DoubleClick’s privacy practices.

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