A Democratic bill introduced this week that would prohibit many forms of behavioral targeting is drawing praise from privacy advocates, but heated opposition from others, including the industry group Interactive Advertising Bureau and Washington, D.C. think tank Information Technology and Innovation Foundation.
The “Banning Surveillance Advertising Act,” introduced Tuesday by Reps. Anna Eshoo (D-California), Jan Schakowsky (D-Illinois) and Senator Cory Booker (D-New Jersey), would broadly prohibit ad networks and “facilitators” from drawing on a host of information -- including data about online browsing history and unique identifiers -- for ad targeting.
While numerous other privacy bills have been introduced in Congress in the last few years, the Banning Surveillance Advertising Act is the only one that would broadly ban most forms of behavioral targeting. The other bills propose variations of the notice-and-consent model -- meaning the bills would allow companies to target people based on their online activity, but would also require companies to obtain consent on either an opt-out or opt-in basis.
The Banning Surveillance Advertising Act was introduced with the support of privacy watchdogs including the Center for Digital Democracy and Electronic Privacy Information Center.
But the Interactive Advertising Bureau contends the measure would jeopardize millions of jobs, harm small businesses and raise costs.
“Banning personalized ads would severely impact an increasingly important economic sector, stifling innovation and dramatically harming the small business community who use data-driven advertising to promote their goods and services and reach customers all over the world,” IAB CEO David Cohen stated Wednesday. “This bill would make advertising less precise, more expensive, and raise costs for everyone.”
The IAB also unveiled a new campaign on Wednesday, Internet for Growth, which aims to showcase small business owners who could be affected by new restrictions on online advertising.
The Information Technology and Innovation Foundation (whose funders include tech companies) adds that the Banning Surveillance Advertising Act “would destroy a key pillar of the Internet economy.”
Daniel Castro, vice president of the think tank, says the measure's approach to privacy regulation is “out of mainstream thoughts.”
“It's a very extreme proposal,” he tells MediaPost.
The organization writes: “Banning targeted ads would make online advertising much less effective, so advertisers will pay less for them and those who display ads -- including app developers, media companies, and content creators -- will earn significantly less revenue. Faced with a budget shortfall, many online services will have few options other than to either reduce the quality of their services or charge their users fees.”
The group adds that this result “would be antithetical to the progressive agenda because it would leave many American families much worse off in terms of access to online content and services.”
Adam Kovacevich, CEO of the tech-funded policy group Chamber of Commerce, voiced similar concerns.
“Why are Democrats taking aim at the ad-supported model that helps fund small newspapers, content creators, and diverse voices online?” he tweeted Wednesday. “My fellow Dems should support expanding access to information, not putting it behind paywalls and Substacks.”
But Katharina Kopp, deputy director for policy at the Center for Digital Democracy, says the law proposed on Tuesday would usher in a new ad business model “that is no longer predatory and harmful.”
“The current surveillance advertising business model is the practice that causes hams, that discriminates and exacerbates inequities. It does so by either targeting marginalized communities with harmful and predatory ads or by excluding many from opportunities,” she says in a statement provided to MediaPost.
Despite the general ban on behaviorally targeted ads, the measure would still allow certain types of online targeting. For instance, the measure would allow companies to target ads contextually (meaning based on the material displayed on the same page as the ad), but would prohibit companies from using data associated with those ads for additional targeting.
Castro argues that contextual ads are “not a full replacement” for data-driven ads, especially for companies that attract small, diverse users.
“If you want to maximize the revenue there, you're going to need to know something about your audience,” he says.
But Kopp counters that “there is little evidence that contextual advertising would be less effective than surveillance advertising.”
“The proposed legislation would not ban online advertising, it would regulate how online advertising is done,” she writes.