Privacy proposals put forward by the Federal Communications Commission "threaten to hamper the data-driven growth of the Internet economy," the Interactive Advertising Bureau says.
The proposed regulations would prohibit broadband providers from using data about consumers' Web activity for ad-targeting purposes without their opt-in consent. The rules would only apply to Internet service providers, and not companies that offer Web content or services -- like Google, Facebook, Netflix and ad networks.
Those companies, called "edge providers," typically allow consumers to opt out of receiving behaviorally targeted ads, but don't seek people's explicit consent to tracking them for ad-serving purposes.
The IAB says in its comments that it isn't practical to hold edge providers and ISPs to different standards. "Though there are technical and historical differences between these two constituencies, the fact remains that attempting to apply a regulatory regime to any part of the dynamic data driven environment of the Internet is impractical," Dave Grimaldi, executive vice president of public policy at the IAB, writes in a new FCC filing. "The interconnected nature of the Internet has fostered the rapid growth of the Internet economy, and should not become subject to government regulations that will slow the innovation the Commission proposes to protect."
Privacy advocates and consumer groups support the FCC's proposal. They argue that broadband providers should be subject to tough privacy rules because they have a comprehensive view of people's Web activity. Proponents of the rules also argue that consumers have limited options for broadband services, but a vast array of choices about which sites to visit.
FCC Chairman Tom Wheeler argues that broadband providers should be subject to more restrictions than Web sites for several reasons. "We can choose not to visit a Web site or not to sign up for a social network, or we can choose to drop one and switch to another in milliseconds. But broadband service is different," he recently stated. "Once we subscribe to an ISP -- for our home or for our smartphone -- most of us have little flexibility to change our mind or avoid that network rapidly."
The IAB says the industry's self-regulatory system will protect consumers' privacy. The self-regulatory code generally requires companies to notify consumers about ad targeting via an icon, and allow them to opt out of receiving behaviorally targeted ads.
"Absent a demonstrated failure of the market to respond to a practice causing actual consumer harm, the Commission should not impose new regulations in the space," the IAB says. "Government regulation of an innovative and expanding marketplace would create a chilling effect that would stifle growth. Instead, the Commission should allow industry to continue to regulate itself through responsive programs that provide consumers with transparency and control, and that hold companies accountable for their actions through active industry enforcement programs."