The advertising trade body says the US government’s consumer protection agency has no authority to brand all practices involving consumer data as “unfair or deceptive.”
In a letter addressed to the Federal Trade Commission (FTC), the Interactive Advertising Bureau (IAB) – a trade body that represents more than 700 companies –has condemned potential legislation, touted in an Advanced Notice of Proposed Rulemaking (ANPR), that it says would severely restrict the use of consumer data for sectors including digital advertising.
The ANPR document includes numerous definitions of online advertising that the IAB vehemently disagrees with, such as the line “the prevalence of commercial surveillance and data security practices that harm consumers.”
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Lartease Tiffith, the IAB’s executive vice-president for public policy, has accused the commission of “claiming broad regulatory authority, which bipartisan lawmakers have repeatedly denied,” and said that it is “redefining the ordinary collection, aggregation, and analysis of consumer data as ‘commercial surveillance’ – a definition so broad potential FTC rules could criminalize the internet itself.”
Tiffith added: “The internet is built on the continuous exchange of data between devices and servers – without these data exchanges, the internet and its social, cultural, economic, and personal benefits would not exist.”
Tiffith cited research from the Digital Advertising Alliance (DAA) and the Massachusetts Institute of Technology (MIT) that claims eight of the top 10 websites in the United States are mostly free due to digital advertising. Whether these websites could continue to effectively advertise without the mass gathering of data will be the question on critics’ minds.
Tiffifth also warned that small publishers would be especially “hard-hit” by the proposals. “All Americans would bear the brunt of a ban on data for e-commerce and other common online activities the FTC describes as ‘commercial surveillance’ in its notice, a prelude to official rulemaking.”
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The IAB is arguing that the FTC has “no authority” to brand “essentially all practices involving the use of ‘consumer data’ to be unfair or deceptive.” It also accuses the FTC of not following its own rulemaking procedure by “failing to 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.”
It noted that there has been an “abrupt” course change under its new leadership. As the fallout continues, the fate of personalized advertising hangs in the balance. The American Advertising Federation spoke out against the bill earlier this year.
The tide of privacy regulation is incoming globally – in Europe, the IAB is navigating EU commission accusations that its framework, which is used by 80% of Europe’s websites to track web users, isn’t legally water-tight under existing rules.
For more on how the world of data-driven advertising and marketing is evolving, check out our latest Deep Dive.