Industry Leaders and Privacy Experts Weigh In on FTC's Data Rule-Making Session

The Federal Trade Commission hosted a public forum today regarding its Advanced Notice of Proposed Rulemaking (ANPR) on “commercial surveillance and data security” practices that harm consumers and competition. Industry leaders, including advertisers, publishers and privacy advocates, participated in the hearing to provide their perspectives to help the agency collect best practices for new rules. The FTC, chaired by Lina Khan, has often taken a stance against Big Tech, especially regarding antitrust practices. This crackdown to protect Americans' privacy is the latest attack on tech and data companies and could upend how they collect data. In today's public hearing forum, the FTC aimed to gather insights from the industry and the public at large on 95 wide-ranging questions, many with numerous subparts. Meta did not make it to today's hearing, but here is what some of the others had to say. Jason Kint, CEO, Digital Content Next Many in the industry, according to Kint, will claim that behavioral advertising is the golden goose that fuels the internet. "Collecting data in one context and then using it in another, such as the case with behavioral advertising that collects data over time across multiple sites owned by multiple companies, tends to violate consumer expectations,” he said. “But the truth is publishers only see a 3% increase in revenue.” Ultimately, the risk, according to Kint, is when all data is treated equally. The low-hanging fruit for FTC would be to go after third parties that track users without them knowing. Kint noted the FTC should pay special attention to the dominant companies in the ecosystem. “The FTC’s $5 billion settlement with Facebook didn’t fix the problems,” he tweeted after the hearing. “No publisher received a dime of Facebook’s settlement,” he added at the hearing. As a best practice, Kint recommended having an opt-out from third parties that users aren’t intending to interact with to simplify things. Paul Martino, vp and senior policy counsel, National Retail Foundation Emphasizing the importance of data in retail, Martino said customers want product offerings tailored to them and related to past shopping activity. This helps them make choices about future purchases. And for that, “retailers should be allowed to respond to these consumer demands.” When it comes to retailers' sites, Martino said businesses shouldn’t bother the consumer with pop-ups, given the transactional nature of their relationship. Plus, retailers already have tools in place that protect people’s privacy. “The FTC should not inadvertently craft broad regulations,” he added. Marshall Erwin, chief security officer, Mozilla According to Erwin, bad behavior is “too easy” and is a consequence-free zone. He said regulators need to increase penalties and "increase the cost" to make commercial surveillance less enticing. Erwin also noted he wanted to see a shift from behavioral advertising tactics to a “benign method” of advertising that gives a meaningful monetary gain, like collecting first-party data or contextual targeting. As a best practice guideline for the FTC, Erwin highlighted specific safeguards for business models for all companies to consider. These included basic encryption practices, basic access controls to govern data and strong password requirements. “If the company isn't doing [these], you should probably think about not using their products,” he said. “And if these things aren't in practice at the company, it's worth scrutinizing that company much more closely.” Spencer Overton, president, Joint Center for Political and Economic Studies While speakers drew FTC’s attention to ads that are discriminatory in its targeting nature, Overton was particularly concerned that these practices are less obvious to regulators or advertisers. Platforms like Facebook and Google often rely on users' data, which they use to create algorithms to determine which users are most likely to engage with certain ads. Overton notes that advertisers and regulators often don't understand how these algorithms work, which causes them to miss when ads are delivered in a discriminatory manner. “Businesses can arguably more effectively spin their advertising dollars. And these processes can facilitate discrimination,” he continued. As an example, Overton pointed to ads for employment opportunities that can be steered toward male users and away from women or ads for new housing that can be steered toward white users and away from Black and Latinx communities. To that point, Overton cited Meta's settlement of a housing discrimination case with the Justice Department after it was accused of allowing landlords to target their housing ads in discriminatory ways. Government officials said that the platform allowed advertisers to target housing-related ads based on sensitive characteristics like race and gender, and thus, Facebook's ad targeting tool enabled housing discrimination. “These things aren’t transparent. The FTC and other federal agencies can play an important role here,” he said. Ad Tech Granted Some Relief With Federal Privacy Bill ‘Dead’ in This Congress