The Federal Trade Commission should outlaw so-called “surveillance advertising” as an unfair method of competition, the watchdog Accountable Tech urges.
The group argues in a petition filed this week that “surveillance advertising” is unfair to consumers, and also harms competition by enabling companies that collect data to use the information to dominate new markets.
Accountable Tech describes surveillance advertising as involving three “distinct but interlocking” types of conduct -- the “unfair extraction and monetization of data by dominant firms,” the “integration of data across business lines,” and “exclusive dealing.”
The group adds that the concept involves collecting data about consumers and then serving them ads across sites and services, based on personal information -- defined as data linked or reasonably linkable to an individual or device, including browsing history.
(Earlier this year, groups including Accountable Tech defined surveillance advertising slightly differently, as “the practice of extensively tracking and profiling individuals and groups, and then microtargeting ads at them based on their behavioral history, relationships, and identity.”)
Accountable Tech argues in its petition that surveillance advertising is “fundamentally rooted in the widespread extraction and monetization of private data by dominant firms.”
The organization says the “strongest and simplest” step for the FTC would be to prohibit online platforms from delivering ads based on personal data.”
That type of rule could prohibit web companies from serving targeted ads to consumers based on data collected directly from them.
The watchdog alternatively proposes a rule that would “prohibit businesses from sharing user data, for the purposes of advertising, to any business line, website, advertising technology, or tracker other than the business or service with which a user intentionally interacts.”
That second proposal would still allow online publishers to serve targeted ads to users based on their interactions with the publishers' sites.
Rep. Anna Eshoo (D-California), who is preparing legislation that could restrict targeted advertising, expressed support for the group's petition.
“The ‘surveillance advertising’ business model is premised on the unseemly collection and hoarding of personal data to enable ad targeting,” she stated. “This pernicious practice allows online platforms to chase user engagement at great cost to our society, and it enables online disinformation, discrimination, voter suppression, privacy abuses, and so many other harms.”
The petition comes as the FTC reportedly is considering issuing new privacy rules -- a lengthy and formalistic process that would require the agency to hold hearings.
In the past, the agency has tended to deal with privacy matters on a case-by-case basis -- often by prosecuting companies that made misrepresentations about their privacy policies. Those prosecutions tended to rest on the theory that the companies violated the FTC Act by engaging in deceptive practices.
On Wednesday, Senator Richard Blumenthal (D-Connecticut), cheered news that the FTC might begin the process of issuing new privacy regulations.
"This development would be very, very welcome," he said at a Senate Commerce Committee hearing about privacy.
Former FTC Commissioner Maureen Ohlhausen expressed doubts at that hearing about whether the agency could pass rules that would override state measures.
"There will inevitably be a conflict between an FTC rulemaking and the increasing number of state laws and rulemakings, which will create confusion with respect to what requirements apply, and will further fragment U.S. privacy protections," she stated in a written version of her testimony.