The ad industry and advocacy groups on Monday weighed in with the Federal Trade Commission on potential new privacy rules, with the ad industry voicing opposition to possible regulations, but consumer advocates contending that new rules are needed.
“Advertising is the lifeblood of the American economy,” the Association of National Advertisers said in comments filed with the agency Monday. “The FTC should not presuppose that any kind of data-informed advertising is harmful without the administrative record necessary to support such a bold assertion.”
The umbrella industry organization Privacy for America added that the FTC “should not cast itself as a quasi-legislature capable of regulating any activity it sees fit without a grounding in its congressionally granted authority.”
“The more prudent path would be for the Commission to refrain from seeking broadly to regulate the entire U.S. data-supported economy while Congress is actively considering a comprehensive, preemptive standard,” writes Privacy for America, whose members include the American Association of Advertising Agencies, Association of National Advertisers, Digital Advertising Alliance, Interactive Advertising Bureau and Network Advertising Initiative.
Advocacy groups, on the other hand, argue that rules are needed to curb the rampant collection and sharing of data.
For instance, Public Knowledge and the Yale Law School Tech Accountability & Competition Project pointed to allegations that data broker Kochava sold consumers' sensitive location data.
“Kochava is just one broker in a massive user tracking economy,” the groups wrote in a joint filing. “The answer must be an industry-wide rulemaking.”
The groups' comments come in response to the FTC's request for input about potential regulations aimed at curbing so-called “commercial surveillance” -- which the agency defined as "the collection, aggregation, analysis, retention, transfer, or monetization of consumer data and the direct derivatives of that information."
This summer, the FTC initiated the regulatory procedure by issuing an “advance notice of proposed rulemaking” -- a 44-page document that requests comments on a broad swath of topics, including online ad targeting. In that advance notice, the FTC said media reports and public research “suggest that harmful commercial surveillance and lax data security practices may be prevalent and increasingly unavoidable.”
The Association of National Advertisers says it has “significant concerns” about the FTC's approach -- including its use of “the pejorative term 'commercial surveillance' broadly to encompass virtually any advertising practice that uses data, including targeted advertising.”
The group writes: “Such a negative framing of advertising and data practices shows that the Commission is already keenly fixated on limiting data use for advertising when academics, elected representatives, and even past and present FTC officials have acclaimed the benefits of advertising and the self-regulatory data efforts in the space.”
The organization adds that the FTC's “apparent aim” to restrict the use of data doesn't take into account potential benefits of ad targeting.
“Data-driven advertising single-handedly subsidizes individuals’ ability to access a wealth of information online for free or at a very low cost and creates myriad opportunities for employment,” the Association of National Advertisers writes.
Privacy for America also criticized the idea that serving ads contextually -- meaning placing ads adjacent to relevant content -- can substitute for targeting ads to users based on their activity over time and across sites.
“If only contextual methods of advertising remain available, charities that fund efforts to save animal species from extinction, for example, would not be able to effectively use ad space on properties unrelated to their cause to spread their messaging,” the organization writes. “Further, available spaces for advertising of general interest goods (such as toilet paper, razors, and dog food) would be severely limited because it is difficult -- if not impossible -- to determine (based on the context of a given website) that ads for such goods would be appropriate.”
But Public Knowledge argues in its filing that “commercial surveillance” practices -- including online tracking -- are themselves deceptive and unfair.
“Most consumers have no idea the breadth and depth of their intimate data collected through seemingly innocuous activities such as web browsing,” the advocacy group writes. “Furthermore,” the group adds, “these practices are unfair to the average consumer, because it is nearly impossible for consumers not to be surveilled while they surf the internet.”
As of Monday afternoon, hundreds of organizations and individuals had weighed in with the FTC. The Interactive Advertising Bureau and NetChoice (which represents tech companies), were among the groups to urge the agency to abandon the rulemaking, while a coalition of attorneys general, as well as Senator Kirsten Gillibrand (D-NY), pressed for new regulations.
Additional comments are expected to roll in to the FTC throughout Monday.