Super Committees That Work

by Mike Zaneis, Dec 20, 2011, 7:15 AM

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The Congressional Joint Select Committee on Deficit Reduction or “Super Committee” qualifies as nothing short of an “Epic Fail.”  In a move to decrease the long-term deficit and keep spending in check, Congress initiated a fairly unique process to empower a few leaders to craft a solution for the whole. 

It was a bold move that eventually fell victim to ideological positioning and partisan politicking.  The implosion of the Super Committee highlights the difficulty legislators have in coming together to solve the country's most pressing and complex problems -- simplifying the tax code, reforming entitlement programs, prioritizing defense spending and regulating online advertising.

If that last one seems out of place, you're not alone -- but not all Members of Congress agree. Look no further than the six bills introduced this year that would increase restrictions on how the advertising industry collects and utilizes data.  However, the Super Committee is a microcosm of the difficulties that each of these consumer privacy proposals face. And make no mistake; each of these proposals would result in an Epic Fail, not just for our industry, but also for the millions of American consumers who benefit from a wealth of ad-supported content and services.

The two most prominent bills have originated in the Senate Commerce Committee where Senators John Kerry (D-MA) and John McCain (R-AZ) introduced S.799, the “Commercial Privacy Bill of Rights.” Their proposal would cover nearly every entity in the marketing and advertising supply chain, including online and offline operations. 

The legislation creates a complicated set of responsibilities and liabilities for first-party publishers and third-party actors around the notions of notice and choice. In an effort to over-correct for the heavy-handed nature of these restrictions, the bill then creates a myriad of technical and fundamentally impractical exceptions. 

One such restriction would require a Web publisher to provide consumers with access and correction to marketing data, an unprecedented restriction, while providing an exception if they anonymize or stop using the information altogether -- or, as I like to call it, the “Go Out of Business Exception.”

Not to be outdone, Chairman John Rockefeller (D-WV) sponsored S.913, the “Do Not Track Online Act.”  Instead of creating a laundry list of restrictions and exceptions, this bill abrogates nearly all decision-making responsibility to the Federal Trade Commission to create a Do Not Track mechanism. 

The bill attempts to capitalize on the general support for all things related to the Do Not Call Registry. However, even the FTC thinks this may be an unnecessary step, with the chairman recently stating, “(u)nlike Do Not Call, we do not think Do Not Track should be administered by the government.”

As we come to the close of the year, none of the consumer privacy bills have passed. None have even been the subject of a legislative hearing.  Consider that in 2010 I testified before the House Energy & Commerce Committee, which at the time was considering two separate privacy bills. Why has this legislative push stalled? 

The answer is twofold -- key decision-makers have come to appreciate just how complicated it is to fundamentally change markets through regulation, and industry self-regulation has proved successful.

I started out by describing the Super Committee process as “fairly unique,” because while the Super Committee was a first for Congress, something akin has been successfully implemented in the digital advertising space for years.  

Private-sector self-regulatory programs have been able to craft revolutionary solutions to complex issues, most recently in the consumer privacy area.  Like the proposed Super Committee process, a representative selection of leaders has come together to create a set of principles that are effective and implementable for the entire industry. 

Just as in the political world, there are always different policies, politics, and motives involved, but what drives the success of these self-regulatory super committees is a sense of altruism -- to go beyond what may merely benefit their company in order to improve the ecosystem. 

This shared commitment is evidenced by the fact that thousands of other companies are willing to change their business practices in order to adopt the solutions of the super committee. With the start of each new year comes a renewed spirit. Congress will begin 2012 with a fresh look at consumer privacy. The 112th Congress will return in January as it takes up its second session, which means all of the previously identified bills are alive and well.

Even so, I expect Congress to shift its attention to other areas, such as privacy on mobile devices and the use of location-based data. Already, there are several legislative proposals in this area, including Senator Al Franken's (D-MN) “Location Privacy Protection Act” and S.1212, the “Geolocation Privacy and Surveillance Act.” The mobile marketing platform will be as complex and troublesome for Congress to regulate as traditional online advertising has been. 

But we have a super committee for that, too, as the IAB Mobile Marketing Center of Excellence and the cross-industry Digital Advertising Alliance are currently working to expand existing self-regulation to cover the mobile platform.  

Building upon a history of success, we can continue to meet consumer expectations while avoiding the pitfalls of Congress’ Super Committee. If we continue to pull together and commit to self-regulation, we can elude any trace of an Epic Fail.

--Mike Zaneis is the senior vice president, public policy and general counsel for the Interactive Advertising Bureau.

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