Congress Considers New Targeted Advertising Law - Klein Moynihan Turco LLP

Congress Considers New Targeted Advertising Law

Recently, several members of Congress introduced a bill aimed squarely at the digital marketing industry. Dubbed the Banning Surveillance Advertising Act, the bill amounts to a targeted advertising law that looks to ban or seriously curtail what sponsors term “surveillance advertising.” Put simply, the Act would ban advertising facilitators (like Facebook, Google, and data brokers) from using certain personal data to target advertising to consumers. While the bill contains important exceptions, its reach could be broad and could reshape the digital advertising landscape.

How would the Act change targeted advertising laws?

Today, advertising facilitators, such as Facebook, collect the personal data of millions of Americans. Those facilitators then use or sell that personal data to tailor a particular user’s advertising experience to maximize effectiveness. For instance, a facilitator may know that a particular user is 30 years old and married with one child. The facilitator could then use that personal information to target that consumer with life insurance, childcare, and certain political issue ads concerning school choice or universal pre-K. The bill would ban this sort of targeted advertising.

The bill does contain two notable exceptions. First, broad consumer geolocation data for a particular user would still a viable metric for targeting. Specifically, if the bill became law, a consumer’s location in a certain city would be fair game for advertisers to use, but micro-targeting to the consumer’s actual home address would not. Second, advertising facilitators would be free to target consumers based on information that the consumers have engaged with (often called “contextual advertising”). For example, where a consumer is researching backyard grills, an advertising facilitator could target that consumer with ads for charcoal. 

In addition, the bill contains several enforcement mechanisms. First, it would empower the Federal Trade Commission (“FTC”) to make and enforce rules that implement the bill’s prohibitions. The FTC could also bring an enforcement action against violators (much like in other existing telemarketing contexts). Second, state attorneys general would have investigative and enforcement power in much the same way as the FTC would. Finally, the bill contains a private right of action, allowing aggrieved individuals to sue violators. Under the terms of the bill, companies could face penalties of between $100-$1,000 per violation, or between $500-$5,000 for reckless or intentional violations. The suing plaintiff may also recover his or her attorney fees and costs. 

Why does the bill matter to your business? 

It bears repeating that the bill is just proposed legislation right now. If it continues through the legislative process, it will undergo changes and could look much different than it does today by the time it is up for a vote in Congress. Practically speaking, the bill restricts commercial speech, but it also could be deemed to exclude political speech. The United States Supreme Court has not treated laws restricting speech, especially political speech, kindly over the last 15 years. 

The bill’s foundational concerns align with other laws already on the books – most notably the California Consumer Privacy Act (“CCPA”). Among other goals, this targeted advertising law intends to protect consumer personal information from being treated as nothing more than a commodity for trading. Digital marketers have already had to negotiate that shift when coming into compliance with the CCPA (and its recent 2020 voter-approved expansion), the EU’s General Data Protection Regulation (“GDPR”), and other state laws. While the bill, as written, would signal a sizeable shift in the national digital marketing environment, a narrower version could work to the benefit of the industry by establishing a single uniform set of rules for how advertisers can use personal data to create a tailored advertising experience.

Hire experienced data privacy and digital marketing attorneys. 

While the Banning Surveillance Advertising Act may not be law yet, digital marketers still have a complicated patchwork of personal data usage restrictions to navigate today. Because the United States does not have a national standard governing the use of consumer data akin to that of the GDPR, understanding which state and/or federal laws apply to your business is a crucial and time-intensive exercise for those in the digital marketing space. The attorneys at Klein Moynihan Turco have years of experience in helping businesses effectively use consumer data for advertising purposes while staying on the right side of the law. 

If you need assistance with updating your consumer data privacy policies, email us at info@kleinmoynihan.com or call us at (212) 246-0900

The material contained herein is provided for informational purposes only and is not legal advice nor is it a substitute for seeking legal advice from an attorney. Each situation is unique, and you should not act or rely on any information contained herein without seeking the advice of an experienced attorney.

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Photo by Will Francis on Unsplash

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