Ad Industry, Privacy Advocates Spar Over 'Surveillance Advertising'

The ad industry on Thursday urged the Federal Trade Commission to reject calls to prohibit online behavioral targeting, but privacy watchdogs advocated for new regulations that would curb data-driven advertising.

The Association of National Advertisers argued in written comments that data-driven advertising benefits consumers as well as advertisers.

“Consumers receive virtually free access to massive amounts of information online in large part due to the ad-subsidized Internet,” the ANA wrote in a 14-page filing. “Additionally, thanks to data-driven advertising, consumers are presented with advertisements and messaging that is tailored to them, thereby benefitting consumers by giving them information that is useful and maximizing efficiency in businesses’ interactions with their existing and prospective customers.”

But others, including Consumer Reports and the Electronic Information Privacy Center, urged the agency to crack down on current practices. 

“Unfair data collection practices and surveillance have eroded consumer privacy, and this unwanted observation constitutes substantial injury to consumers,” those two organizations contended.

The comments came in response to a petition filed last year by the watchdog Accountable Tech, which urged the FTC to outlaw “surveillance advertising.”

Accountable Tech described 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 elaborated that the concept involves collecting data about consumers, and then serving them ads across sites and services based on personal information -- meaning data linked or reasonably linkable to an individual or device, including browsing history.

Among other arguments against Accountable Tech's petition, the ANA said many online companies might shift to a subscription model if they were no longer able to generate revenue through data-driven advertising.

“An increase in subscription-based services would change the egalitarian nature of the Internet, with consumers of means able to access cutting edge content and services while consumers with less expendable income would not be able to access such information,” the organization wrote.

The ANA also said a ban on behavioral targeting is unnecessary, because consumers can opt-out of receiving ads based on their inferred interests through the ad industry's self-regulatory program.

“Consumers are empowered to take action to stop the practice if they do not want to allow companies to use data associated with them to present them with relevant content and advertisements,” the group wrote. “No concrete harms have been presented by the petition that counterweigh the benefits consumers receive.”

But a variety of watchdogs -- including Amnesty International and Center for Digital Democracy -- disagreed.

“Amnesty International considers current targeted advertising practices that rely on indiscriminate corporate surveillance and profiling -- including surveillance advertising -- to be inherently incompatible with human rights,” the global rights organization said in its filing.

"The scale of the data collected by Google and Facebook means that these companies are amassing more information on human beings and human activity than previously imaginable," Amnesty International added. "The aggregation of so much data, combined with the use of sophisticated data analysis tools, can reveal very intimate and detailed information; in effect, the companies can know virtually everything about an individual."

The privacy watchdog Center for Digital Democracy -- which in 2006 first urged the FTC to investigate online behavioral targeting and data mining -- faulted the agency for not acting sooner.

“The systemic and multiple failures of the FTC over the decades to respond meaningfully to the role and nature of online marketing -- which has eviscerated the privacy rights of Americans (and consumers worldwide) -- have enabled data-driven surveillance to thrive ubiquitously,” that organization wrote. “Nearly every platform, application, device and experience in which Americans engage has been shaped by the commercial spying and manipulation apparatus that the commission has allowed to evolve and expand without constraint.”

Consumer Reports and the Electronic Privacy Information Center argued in their filing that the FTC could address online privacy by establishing rules that would restrict companies from collecting data for one purpose -- such as to provide a specific service -- and then using it for another.

“The tracking implemented by platforms like Google and Facebook is not technically necessary to rendering services, and it assaults long-held norms surrounding privacy,” the two organizations wrote.

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