On Tuesday, Congresswomen Anna G. Eshoo (D-CA), Jan Schakowsky (D-IL) and Senator Cory Booker (D-NJ), introduced the Banning Surveillance Advertising Act, a bill that would dramatically alter the ways tech companies like Google and Facebook can leverage personal data for online ads.
The bill is attracting pushback from, among others, the Interactive Advertising Bureau (IAB).
The digital advertising body said the bill could jeopardize an estimated 17 million jobs, primarily at small- and medium-sized businesses that account for a large share in internet economy growth. The IAB—which represents 700 media companies, brands, agencies and technology firms—slammed the bill, saying that it would “effectively eliminate internet advertising in the United States.”
Data-driven digital advertising is the heart of online commerce that helps industries diversify the products and services consumers rely on. However, if the new bill becomes a law, advertisers will find themselves with a limited capacity to maximize targeted, programmatic or personalized ads.
Calling it “surveillance advertising” and the “unseemly collection and hoarding of personal data,” Rep. Eshoo said her bill will explicitly prohibit targeting ads based on protected class information, such as race, gender and religion, including personal data purchased from data brokers. The bill would allow targeted ads based on general location data at the city and state level and contextual advertising—or advertising based on the content a user chose to engage with.
With the bill, the Federal Trade Commission (FTC), along with state attorneys general, would have the authority to enforce fines of up to $5,000 per violation.
National privacy reform has taken a back seat to other issues in Washington D.C, while individual states are moving forward with their own privacy laws.
This was evident in 2021 alone, where 23 states introduced 34 different data privacy bills, which may “significantly hinder the thousands of small and mid-sized businesses that rely upon data-driven advertising,” according to IAB CEO David Cohen, who advocates for a federal privacy law.
Pointing to an IAB study, The Economic Impact of the Market-Making Internet, Cohen echoes how the internet economy grew seven times faster than the total U.S. economy from 2016 to 2020 and accounts for 12% of gross domestic product.
“If the sponsors understood the devastating effects this bill would have, not only on the advertising industry but also on our entire economy, they wouldn’t have introduced it,” he said. “This bill would make advertising less precise, more expensive and raise costs for everyone.”
In a pursuit of successful lobbying on many issues including privacy, the responsible use of data for advertising and content moderation, in Washington D.C, the IAB is also focused on ensuring the “unintended consequences of [this] bad legislation” is not realized, he added.
The likelihood of the bill passing is remote, according to Cohen, who deems the premise of the legislation to be fundamentally flawed.
