Industry Groups Urge FTC To Reject Petition To Regulate Ad Tech

Ad industry groups are urging the Federal Trade Commission to reject a law professor's request to regulate online programmatic advertising in ways that could restrict companies' ability to serve ads to people based on their activity across sites.

“The internet is built on the continuous exchanges of data between devices and servers; without these data exchanges, the internet and its social, cultural, economic, and personal benefits would not exist,” the Interactive Advertising Bureau said in comments filed with the agency late last week.

“The reasonable use of data provides tremendous benefits to consumers, the economy, and society as whole, and helps assure our nation’s current competitive position globally,” the Interactive Advertising Bureau continues. “Were the petition to be granted, the unreasonable restrictions on the data-driven digital advertising ecosystem would significantly impede innovation, reduce consumer choice and increase consumer costs, as well as create barriers to entry for new market participants.”

The group's filing comes in response to a petition by Brooklyn Law School professor Jonathan Askin, who urged the FTC to consider regulating some programmatic ads. The FTC is currently considering issuing broad privacy regulations, but Askin's petition dealt only with one narrow aspect of online advertising -- programmatic ads served on publishers' sites.

“At some point over the past few decades, we, as a society, have decided, intentionally or not, to accept the process of viewing ads in exchange for consuming 'free' content on the internet,” Askin wrote in his 65-page petition. “Nowadays, this trend goes even further -- instead of seeing ads in exchange for free content, people now unwittingly provide countless unknown advertising technology companies with vast amounts of our personal data in exchange for a few brief moments of attention on a sensationalized article, overwhelmed by ads and slow page loads.”

He argued that the current privacy framework -- which involves notifying consumers via privacy policies about data collection, and allowing them to opt out -- is flawed for several reasons, including that privacy policies typically allow companies to share data with undisclosed third parties.

“New regulation is needed that takes the burden off of the individual to read a privacy policy,” he argues. “Instead, the burden to be compliant and respectful of privacy should be placed on those who have the knowledge, expertise, ability, and resources to do so -- the ad tech companies themselves.”

He also argued that the industry's self-regulatory privacy efforts aren't meaningful, noting that the self-regulatory organization Network Advertising Initiative doesn't appear to have referred companies that violate the industry's privacy code to the FTC.

The Network Advertising Initiative, as well as the self-regulatory coalition Digital Advertising Alliance and the umbrella group Privacy for America, also urged the FTC to reject Askin's petition.

The Network Advertising Initiative specifically said in its comments that it hasn't needed to refer members to the FTC over violations, because members value the group's feedback “and the reputational benefit of membership,” and therefore “overwhelmingly provide swift voluntary resolution of relevant problems.”

That organization also said it disagrees with Askin's request for broad regulation, but added that it “shares the conclusion that the commission has not continued to provide sufficient and timely updates to its principles and guidelines for industry.”

The self-regulatory group noted that the FTC's last comprehensive report on consumer privacy and best practices was issued in 2012, and urged the agency “to spend its resources providing policy statements and interpretive guides.”

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