Senate Judiciary Looks at Digital Ad Space

Focus is on protecting information privacy without blowing up ad-supported 'net model
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The Senate Judiciary Committee took a hard look at digital advertising Tuesday (May 21)*, both from a standpoint of privacy and whether edge providers who are supported by the use of data for ads, are too big to be trusted not to abuse that power and not to allow foreign entities to abuse it, either.

Lindsey Graham

Lindsey Graham

Committee chairman Lindsey Graham (R-S.C.) hoped "somehow" that the relevant committees--judiciary and Commerce primarily--would be able to get together on privacy bills so they could figure out how to give consumers more control, figure out what content to leave up and what to take down, and how to "harden the infrastructure" against foreign involvement.

Judiciary has obviously not been on the same page when it comes to the Mueller report, for notable example.

Sen. Patrick Leahy (D-Vt.) said they recognized they had to consider what privacy bills would do to the need for edge providers to monetize their services in order to keep providing them for free, but that that monetization came from the currency of personal information. "They know what routes we take to work, where we drop our kids off to schools. They can replicate our finger prints and face prints, and we trust them with our most personal communications with friends and family."

He said much of that info is not just held but sold and re-sold to third-party data brokers to build profiles. Monopolizing that information has profound impacts on competition, he pointed out.

Leahy said he and Graham had talked privately about those privacy issues. 

Leahy's goal is to give users opt-in consent on sharing personal information, hold to baseline data security measures, then, if data is breached, provide swift notification and remediation, not months after a breach. He said the government was definitely behind the curve on the issue. 

He cited the California Consumer Privacy Act as a potential template for federal action. Leahy said he appreciated that tech companies are now supportive of privacy legislation--almost all have conceded it is coming and are looking for consistency at least, and to preclude a state-by-state approach.

He said he appreciated their desire for a single standard, but would not accept a lower bar than states are currently setting in the absence of national legislation. "We know we have been lied to in the past," he said, without saying by whom about exactly what.

He said all Americans should have real control and a certain baseline of privacy, otherwise it makes the constitutional guarantees of such privacy "irrelevant."

Witness Brian O'Kelley, founder of AppNexus, and the self-described founder of many of the technologies that make programmatic advertising possible, said Big Tech had gotten too big and he had three suggestions to "reign in these massive companies" to protect consumers and preserve startup innovation: 1) protect consumers rights to their own data (the long-talked-about privacy "bill of rights"); 2) create a regulatory entity that can keep up with innovation and 3) Close the advertising antitrust loophole. 

That loophole, he said, is to use consumer prices as the only measure of consumer welfare. He said that doesn't make sense, perhaps just by acknowledging that consumers pay for data with their personal information. 

Graham said his job was to make sure there was still a viable industry at the end of the day.

*Editor's note: The May 21 hearing is worth watching for anyone who wants to get a better handle on the complex privacy and competition issues related to digital behavioral advertising. The full hearing is here.

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