Microsoft Browser Setting Harms Advertisers, Group Says

A feature in the newest version of Microsoft Corp. (MSFT)’s Internet Explorer Web browser that tells websites not to track online activity is harmful for advertisers and will hurt competition, an industry group said.

The “do not track” setting shouldn’t be on by default in the update of the browser, the board of the Association of National Advertisers said in a letter to Microsoft Chief Executive Officer Steve Ballmer. It was signed by top marketing and sales executives at more than three dozen companies, including Coca-Cola Co. (KO), Ford Motor Co. (F), Wal-Mart Stores Inc. (WMT) and American Express Co. (AXP)

Microsoft plans to include Internet Explorer 10 with Windows 8, the latest version of its personal computer operating system that will be released later this month. The move reduces choices for consumers using the browser, which has a 43 percent market share in the U.S., the trade group said.

“If Microsoft moves forward with this default setting, it will undercut the effectiveness of our members’ advertising and, as a result, drastically damage the online experience by reducing the Internet content and offerings that such advertising supports,” the trade group said in the letter, which was posted on its website. “This result will harm consumers, hurt competition, and undermine American innovation and leadership in the Internet economy.”

Source: Microsoft Corp.

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Source: Microsoft Corp.

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Jennifer McCarthy, a spokeswoman for Redmond, Washington- based Microsoft, declined to comment on the letter. She referred to an Adweek article by Rik van der Kooi, Microsoft’s vice president of the advertisers and publishers group, who wrote that the do not track setting could easily be turned on or off, giving users a choice.

“It is our contention that consumers want more visibility into how their data is used and they’re starting to see value in that data -- just like marketers have seen for a long time,” van der Kooi wrote in the article.

Shares of Microsoft rose less than 1 percent to $29.66 at the close in New York. Microsoft is up 14 percent so far this year, while the Standard & Poor’s 500 Index is up 15 percent.

To contact the reporter on this story: Danielle Kucera in San Francisco at dkucera6@bloomberg.net

To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net

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