Targeted Advertising in the Crosshairs: New Bill Seeks to Ban Many Forms of Targeted AdvertisingBackground

On Tuesday, Congressional Democrats unveiled a new bill to outlaw a wide swath of targeted advertising.  The Banning Surveillance Advertising Act would prohibit ad tech companies from using consumers’ personal information to target ads, with limited exceptions. It also would prohibit advertisers from using third party data, or data about a person’s membership in a protected class, to target ads.  The bill would authorize the FTC, state attorneys general, and private litigants to enforce the law, and the FTC to write rules implementing it.

The effort, led by Senator Cory Booker (D-NJ) and Congresswomen Anna Eshoo (D-CA) and Jan Schakowsky (D-IL), arrives at a time of unprecedented regulatory developments impacting the ad tech industry – most notably, the enactment of new state privacy laws in California, Virginia, and Colorado with provisions regulating the industry. While these privacy laws have focused on giving consumers the opportunity to make choices about data sharing for purposes of targeted advertising, the Banning Surveillance Advertising Act would place blanket prohibitions on such advertising. As we describe here, the FTC has also announced that it is developing a rule targeting “surveillance-based business models,” though the contours of that rule are still unknown.

In a press release, Senator Booker explained his view that “surveillance advertising is a predatory and invasive practice.  The hoarding of people’s personal data not only abuses privacy, but also drives the spread of misinformation, domestic extremism, racial division, and violence.”  Echoing Booker, Rep. Eshoo said that the practice “fuels disinformation, discrimination, voter suppression, privacy abuses, and so many other harms.” Rep. Schakowsky, who chairs the House Energy and Commerce Consumer Protection Subcommittee, said the practice “exacerbates manipulation, discrimination, misinformation, and extremism.”

Given the dramatic changes that the bill would impose on the marketplace, it is not surprising that industry groups have already criticized it forcefully.  In a press release today, IAB stated that the bill would “disenfranchise businesses that advertise on the Internet, and hundreds of millions of Americans who use it every day to find exactly what they need, quickly,” and that it could “eliminate the commercial internet almost entirely.”
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On Wednesday, the FTC announced that Turn, a California-based ad-tech firm, agreed to settle charges that it misrepresented its consumer tracking practices to Verizon Wireless customers. According to the FTC, such customers could not delete or turn off advertising identifiers because Turn synced multiple identifiers without reconciling user preferences or express user requests to delete