New Jersey Passes Opt-Out Privacy Bill

New Jersey lawmakers on Monday passed a privacy bill that requires companies to allow residents to opt out of targeted advertising, meaning ads based on people's online activity over time and across nonaffiliated sites or apps.

The measure, which hasn't yet been signed by Governor Phil Murphy, also requires companies to obtain people's opt-in consent before processing “sensitive” data, such as information that reveals a consumer's race, ethnicity, religion, health condition, sexual orientation, immigration status or precise location.

If enacted, the bill additionally would also prohibit companies from knowingly serving targeted ads to teens under 18 without their consent. The measure will take effect January 2025, if signed.

As with recent privacy laws in California, Colorado, Connecticut, Montana, Texas, Oregon and Delaware the bill requires companies to allow people to reject targeted advertising via a universal mechanism like the Global Privacy Control. Such mechanisms allow people to opt out of all targeted advertising, as opposed to opting out company-by-company.



The New Jersey bill additionally requires companies to refrain from creating profiles of people who activate a universal opt-out tool.

Advocacy group Consumer Reports generally praisedthe bill, particularly the provisions requiring companies to honor opt-out mechanisms. That organization has said universal tools give consumers an easy and usable way of asserting privacy rights.

But some business groups and ad industry organizations opposed the measure, arguing it was being rushed through the legislature.

New Jersey lawmakers significantly amended the bill in the last two weeks of the year, including by adding the mandate to honor universal opt-outs -- a mandate the ad industry has traditionally opposed.

“An overly hasty legislative process without time to seek input from affected stakeholders on the new amendments is likely to result in avoidable inconsistencies and unnecessary regulatory ambiguity,” the Association of National Advertisers, American Association of Advertising Agencies, Interactive Advertising Bureau, American Advertising Federation and Digital Advertising Alliance said last week in a joint letter to the state legislature.

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