The FTC said new regulations could cost billions of web dollars in ad dollars

Internet advertisers say the Federal Trade Commission is ‘overriding’ the will of Congress and its own rules and say it would be ‘misguided’ for them to start regulating the digital advertising and marketing industry as proposed by the regulator.

This came in comments from the Interactive Advertising Bureau on what the IAB says is the FTC’s signal — via a proposed rulemaking notice — that it can use its authority over unfair and deceptive practices to declare ” essentially” the use of consumer data out of bounds.

And, if the end result was indeed that bad, BFI said, “It’s likely that between ‘$32 billion and $39 billion in ad revenue and ecosystems would move away from the open web by 2025.’

Also: IAB report calls privacy legislation a threat to addressability

The IAB points out that the proposed rulemaking singles out targeted advertising and personalized advertising as examples of potentially unfair and misleading “personal surveillance,” which it called a “perplexing and unfounded” change from the IAB’s previous policy. FTC.

The FTC also asserts that targeted and personalized ads have only a “theoretical” potential benefit to consumers, while the IAB asserts that there is ample hard evidence, including that such advertising supports a “part important part of the competitive American economy” and “millions of jobs”.

The IAB says that would be a call for Congress to make, not the agency, and in any case, the FTC violated its rule-making process by not providing a “reasonable alternative” to this overarching approach. “On the basis of procedural shortcomings alone, it would be unreasonable for the Commission to pursue this regulatory effort,” the IAB said.

The group said the FTC’s proposed regulatory regime would make a number of targeted advertisements that support Internet content. “[T]The agency has previously argued for the benefits of personalized advertising, and its efforts to restrict or eliminate it represent the real harm to consumers,” the IAB told the FTC. “Consumers want free or low-cost access to the online services that data-driven advertising provides.”

FTC President Lina Khan is a longtime critic of Big Tech’s data collection and protection practices — or lack thereof — so there could be a thumbs up on the scale from the new rules. “The increasing digitization of our economy – coupled with business models that can incentivize the endless collection of sensitive user data and a vast expansion of how that data is used – means that potentially illegal practices can be widespread,” Khan said in August.

While the FTC has traditionally been an enforcement agency, suing parties — or obtaining settlements — for false or misleading conduct, there is a trend, especially among Democrats, to strengthen its regulatory authority.

Concerns the FTC seeks to address through its potential regulation include:

“Lax Data Security: The immense volume of information that companies collect and use requires a commensurate level of data security to protect it. However, the FTC is concerned that many companies are not investing sufficiently or consistently in securing data. data they collect from hackers and data thieves.

“Dead to Children: Children of all ages are particularly vulnerable to the deception and manipulation that can arise from commercial surveillance.

“Retaliation: The FTC is concerned that many companies are requiring people to sign up for monitoring as a condition of service.

“Watch Feed: Some companies reserve the right to change their privacy terms once consumers have signed up for a product or service. Consumers who wish to retain access may have no choice but to ‘accept these updated terms, even those that materially violate previous privacy promises.”

“Inaccuracy: Very little is known about the automated systems and algorithms that analyze the data. »

“Bias and Discrimination: Certain commercial surveillance practices may discriminate against consumers based on legally protected characteristics such as race, gender, religion and age.

“Dark Patterns: Companies are increasingly using dark patterns or marketing to influence or coerce consumers into making choices they wouldn’t otherwise make, including making purchases or sharing personal information.”

The IAB represents more than 700 media companies, marketers, advertising agencies and technology companies. ■