A federal agency is overreaching, putting online jobs and the economy at risk
WASHINGTON, November 15, 2022 /PRNewswire/ — The Federal Trade Commission (FTC) flouts Congress and its own rules, Advance Notice of Proposed Rulemaking (ANPR) that could severely limit the use of consumer data for nearly all sectors of the economy, including digital advertising, the Interactive Advertising Bureau (IAB) said in public comments the trade association filed with the agency today.
In a statement, IAB Executive Vice President of Public Policy Lartiz Tiffit explains that, in addition to claims for broad regulatory powers that have been repeatedly challenged by bipartisan lawmakers, the FTC is reframing the routine collection, aggregation and analysis of consumer data as “commercial surveillance.” ” — such a broad definition of potential FTC rules could criminalize the Internet itself.
“The Internet is built on the continuous exchange of data between devices and servers—without this exchange of data, the Internet and its social, cultural, economic, and personal benefits would not exist,” Tiffitt writes, citing the impact of digital advertising in supporting free and low-cost online content and services
According to the Digital Advertising Alliance (DAA) and Massachusetts Institute of Technology (MIT), consumers value ad-supported digital services from thousands to tens of thousands of dollars per year. Currently, eight of the top 10 websites in the the United States mostly free thanks to digital advertising.
Digital advertising not only benefits consumers who prefer data-driven, personalized advertising over irrelevant advertising, but small businesses also benefit from lower advertising costs compared to traditional direct mail, radio and television advertising. The IAB estimates that ad spending could increase by hundreds of percent, affecting 64% of small businesses that use digital advertising to compete, according to a Deloitte study.
Small online publishers, most of whose revenue depends on digital advertising, will be particularly hard hit. However, all Americans will bear the brunt of the ban on data for e-commerce and other common online activities, which the FTC describes as “commercial surveillance” in its notice, which is a prelude to formal rulemaking. A Center for Data Innovation study of a similar proposed ban in the Europe shows that “consumers will face the prospect of a radically different Internet: more advertising that is less relevant, lower quality online content and services, and more paywalls.”
The IAB argues that the FTC does not have the authority to label “substantially all practices involving the use of “consumer data” are unfair or deceptive,” matters of “significant economic and political importance” are reserved for Congress under laws governing the FTC and Supreme Court doctrine. In fact, Tiffit notes, Congress is currently debating a nationwide federal privacy law that addresses many of the same issues, and states are deciding their own rules or opting out, emphasizing the FTC’s lack of authority.
In addition, the agency does not follow its own rulemaking process – it does not provide reasonable alternatives as required by law; avoiding responsibility by requiring the public to do so without clear guidance; and creating uncertainty with vague definitions. The IAB stresses that while the FTC has changed course dramatically under new leadership, the agency has previously championed the benefits of personalized advertising, and its efforts to limit or eliminate it are doing real harm to consumers.
“The IAB represents more than 700 leading companies in the digital advertising industry, from brands and publishers to advertising agencies and technology firms. We stand ready to offer our collective experiences and perspectives to improve the FTC’s understanding of digital advertising in today’s economy, including small businesses and every American who relies on Internet advertising for news, information, entertainment, commerce and community,” he said David CohenCEO of the IAB.
Founding member Privacy for America, an industry initiative to protect online privacy, jobs and economic growth, the IAB supports the FTC’s rulemaking in key areas and strengthened enforcement. The framework will set clear rules of the road for individuals, companies and law enforcement and stop harmful and unexpected data practices while preserving the benefits of digital advertising.
About the IAB
The Bureau of interactive advertising enabling the media and marketing industries to thrive in the digital economy. Its members include more than 700 leading media companies, brands, agencies and technology firms responsible for sales, delivery, and optimization of digital advertising marketing campaigns. The trade group conducts critical research on interactive advertising and educates brands, agencies and the wider business community about the importance of digital marketing. In collaboration with the IAB Tech Lab, the IAB develops technical standards and solutions. The IAB is committed to the professional development and enhancement of the knowledge, skills, experience and diversity of the industry’s workforce. Thanks to the work of his public policy office in Washington, DCthe trade association protects the interests of its members and promotes the value of the interactive advertising industry to legislators and policymakers. The IAB headquarters was established in 1996 New York.
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SOURCE Interactive Advertising Bureau (IAB)