Lawmakers Express Support For Bill That Could Outlaw Behavioral Targeting

Bipartisan leaders of the House Energy and Commerce Committee on Wednesday expressed support for privacy legislation that would restrict companies' ability to harness consumers' data, including information about their web-browsing activity.  

“Many companies are using their control over our data to erode people’s agency, their rights, and their identity. It’s time for that status quo to change,”  Rep. Cathy McMorris Rodgers (R-Washington) said in an opening statement at a Subcommittee on Innovation, Data, and Commerce hearing about a suite of online privacy bills -- including the newly introduced American Privacy Rights Act.



A draft of that bill, released last week by Rodgers and Senator Maria Cantwell (D-Washington), has provisions that would restrict -- and in some cases potentially outlaw -- companies' ability to engage in targeted advertising.

“We can either continue down the path we’re on, letting companies and bad actors continue to collect troves of our data unchecked while they trample on core American values, like free expression, free speech, and identity, or we can give people the right to control their information online,” Rodgers continued.

“I'm fired up. We've got to get this done,” subcommittee chair Rep. Gus Bilirakis (R-Florida) said immediately after Rodgers' opening statement.

Rep. Frank Pallone (D-New Jersey) added that he was “optimistic” about Congress's ability “to get comprehensive privacy legislation across the finish line.”

Lawmakers acknowledged at the hearing that the bill was still a work-in-progress.

The draft bill has drawn opposition from the ad industry and other business groups as well as privacy advocates. The industry groups argue that the bill would wrongly restrict online ad targeting; advocacy groups that want to see more limits on online data collection contend that the bill's restrictions are too ambiguous and contradictory.

The version of the bill discussed at Wednesday's hearing would allow consumers to opt out of targeted advertising based on non-sensitive data -- but also defines “sensitive” as including the cross-site and cross-app data that fuels behavioral targeting.

It's not clear how the draft bill would regulate that cross-site and cross-app data. While the bill has some language requiring companies to obtain consumers' opt-in consent before transferring cross-site data, it also has potentially contradictory language that could completely prohibit businesses from harnessing such data for ad targeting.

Attorneys with Squire Patton Boggs argue in The National Law Journal that the draft's provisions, taken as a whole, only make sense if they're interpreted as requiring companies to obtain consumers' explicit consent before harnessing their cross-site data for ad targeting.

The Interactive Advertising Bureau likewise argued Wednesday in a letter to Congress that the bill would require opt-in consent for behavioral targeting. The organization wrote that the draft would "treat ordinary browsing history and other online activity as sensitive and would require consumers to opt-in." 

“The opt-in concept could affect the entire ecosystem, creating a data-poor, much less functional, useful internet,” IAB executive vice president for public policy Lartease Tiffith wrote.

Tiffith elaborated to MediaPost on Wednesday that the bill's language regarding targeted advertising is confusing, and could also be interpreted as banning online ad targeting based on cross-site data.

“I think at the very least, it requires an opt-in,” he said. “It's also fair to argue it's a complete ban.”

The Association of National Advertisers and American Association of Advertising Agencies -- which also weighed in with Congress -- said the bill "could significantly limit" targeted advertising. 

The self-regulatory group Network Advertising Initiative said in a separate letter to lawmakers that the draft “appears to broadly restrict data processing in a way that would severely limit data-driven advertising and other beneficial uses of data that consumers want, and that business can provide responsibly.”

Advocacy group Consumer Reports, which supports restrictions on online ad tracking and targeting, said earlier this week in a letter to lawmakers that the draft's provisions “are too unclear and contradictory to support in their current form.”

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