WASHINGTON, DISTRICT OF COLUMBIA— The Interactive Advertising Bureau strongly disputed the Federal Trade Commission’s Preliminary Notice of Proposed Rulemaking (ANPR) on “commercial surveillance,” arguing that the move would reduce digital advertising by billions of dollars and that the agency is far exceeding its authority. .
In a filing with the FTC, IAB Executive Vice President of Public Policy Lartiz Tiffit complained that the FTC is redefining the routine collection, aggregation and analysis of consumer data as “commercial surveillance,” which the IAB press release describes as “commercial surveillance.” defining potential FTC rules so broad that they could criminalize the Internet itself.”
In August, FTC said it is studying rules to combat harmful commercial surveillance and lax data security related to targeted advertising and the processing of consumer data.
“Firms are now collecting personal data about people on a massive scale and in a staggering array of contexts,” FTC Chairwoman Lina M. Hahn said in a statement. “The increasing digitization of our economy—combined with business models that can encourage the endless storage of sensitive user data and the vast expansion of ways in which that data is used—means that potentially illegal practices can be common. Our goal today is to begin building a robust public record to inform whether the FTC should issue rules on commercial surveillance and data security practices, and what those rules should potentially look like.”
The move could have important implications for targeted and digital advertising, which would appear to fit the agency’s definition of “commercial surveillance” as a business that collects, analyzes and monetizes information about people.
In response, the IAB said in a statement that “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.”
The statement also highlighted the impact of digital advertising in supporting free and low-cost online content and services.
“Data-driven advertising provides great benefits to consumers by supporting the U.S. economy and creating and keeping U.S. jobs,” the IAB said in a statement. “Data-driven advertising and the Internet economy it supports and fuels added $2.45 trillion to the gross domestic product (GDP) of the United States in 2020, representing 12 percent of GDP… In addition, 2.1 million e-commerce businesses operated commerce in the United States in 2020, generating $715 billion in revenue. Many of these millions of businesses are small businesses and sole proprietors who can succeed and grow their customer base with data-driven advertising technologies that lower barriers to entry and expand geographic reach.”
If the FTC’s restrictions were enacted, the IAB said, “Regulations restricting data-driven advertising could also have devastating effects on the more than 17 million American jobs supported by data-driven advertising. Most of these jobs are created by small firms and the self-employed in all 50 states and across many sectors. In fact, self-employed individuals and people working in small teams of five or fewer account for 19% of all online jobs.”
“Furthermore, if the Commission’s rules result in a ban on personalized or targeted advertising, it is likely that between $32 billion and $39 billion in ad revenue and ecosystems will be diverted from the open Internet by 2025,” the IAB said.
In a statement, the IAB also argued that the FTC does not have the authority to label “substantially all actions involving the use of “consumer data” as unfair or deceptive,” a matter of “significant economic and policy importance” reserved for Congress under the Act , governing FTC and Supreme Court doctrine.
In fact, 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, highlighting the FTC’s lack of authority, the IAB said.
“The IAB represents more than 700 leading companies in the digital advertising industry, from brands and publishers to advertising agencies and technology firms. We are ready to offer our collective experience and perspectives to improve the FTC’s understanding of digital advertising in today’s economy, including small businesses and every American who relies on the Internet for news, information, entertainment, commerce and community,” said David Cohen, CEO IAB.
The group also highlighted that it is a founding member of Privacy for America, an industry initiative to protect online privacy, jobs and economic growth, and that 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, the group said.