Ad Industry: Tough Privacy Rules Will 'Undercut' Internet Marketplace

The ad industry is stepping up its fight against proposed privacy rules that would restrict broadband providers' ability to use data about customers' Web activity for ad targeting.

The proposed rules, up for a vote on October 27, would require broadband providers to obtain consumers' opt-in consent before drawing on their Web browsing and app usage history for ad targeting.

Those rules "would undercut the competitive and innovative Internet marketplace, creating a negative impact on consumers and the diverse content and service offerings fostered by the responsible use of web browsing and application use history information for advertising and marketing purposes," the American Association of Advertising Agencies, American Advertising Federation, Association of National Advertisers, Direct Marketing Association, Interactive Advertising Bureau and Network Advertising Initiative say in an FCC filing submitted Wednesday.

The organizations argue that there's no reason to require companies to always seek consumers' opt-in consent to online behavioral advertising. Instead, the groups want the FCC to pattern its rules on the industry's self-regulatory code, which generally calls for companies to let people opt out of receiving targeted ads based on Web-surfing data.

The ad industry does require companies to seek opt-in consent from consumers before drawing on "sensitive" data, but takes a narrow view of that concept. The industry's definition includes precise geolocation information, financial account numbers and health information like prescriptions or medical records.

Ad organizations aren't the only ones lobbying the FCC. Privacy advocates are also weighing in on the opposite side. Many privacy advocates and consumer groups support key portions of the proposed rules -- including the idea that broadband providers should get people's express permission before sending them ads based on browsing history and app usage.

"Advocates laud the Commission for including web browsing and app usage history as sensitive information, and it is imperative that they remain sensitive," Public Knowledge says in a new filing. "The intent of the rule, to place consumers in charge of their information, would be defeated if the sensitive category is too narrowly defined."

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