Antitrust Law Daily Wrap Up, ADVERTISING NEWS: Technology poses new challenges to advertising enforcement: Brill, (Jan 21, 2016)

By Michael Menzhuber, J.D., LL.M.

The explosion of connected devices, mobile apps, more robust methods of data analyses, and technologically-sophisticated native advertising have benefits but also raise concerns that were unimaginable even five years ago, FTC Commissioner Julie Brill said today in her keynote address at the AdExchanger’s Industry Preview 2016 in New York City.

Data collection. Brill stated that advertising has become one of the most technologically-advanced and data-driven industries in the economy. More than ever, advertisers leverage data to reach customers, personalize experiences, and make predictions about consumer behavior. However, while targeting advertising can be good for business in general and for consumers, significant privacy concerns are raised about how much data is collected about consumers, how it is stored, and how it is used.

At a bare minimum, Brill noted, it is critical that consumers are: (1) given relevant information about retail mobile location tracking when it is happening; and (2) able to exercise some control over its use. It is not enough that companies communicate with and provide choices to consumers regarding retail mobile location tracking, they must be truthful about these choices.

She explained that issues surrounding tracking consumers are magnified when future advances in technology are considered and that is not clear that consumers are meaningfully informed about the cross-device tracking that happens. An FTC review of the top 20 websites in five popular consumer categories, although not completed, detected the presence of many third-parties that in engage in cross-device tracking but the absence of many disclosures about this practice.

The technology industry should be mindful of (1) the FTC’s push for more consumer control over third-party data collection online; (2) the agency’s establishment of a universal “Do Not Track” tool where consumers could opt-out of cross-site data collection in their browsers; (3) a commitment by major trade associations in 2012 to find a way to honor browser-based opt-outs by the end of the year; and (4) the standardization of the meaning and operation of the “Do Not Track” mechanism by the World Wide Consortium. Despite these efforts, however, consumers still do not have an adequate means to opt-out of data collection, in Brill’s view.

She expressed surprise that the tech industry has not been more motivated to offer consumers better tools to protect their privacy because it has always been the case that consumers could take matters into their own hands, as evidenced by the fact that Americans made an add-blocking app, “Peace,” and a subsequent ad-blocking app, “Crystal,” number one in the U.S. App Store.

Native advertising. Some marketers and publishers are responding to consumers’ use of ad-blocking services by using native advertising, according to the Commissioner. Native advertising is ad content that matches the design, style, and behavior of the media in which it is disseminated and it is typically inserted into the regular content that a publisher site or social media platform provides. The FTC’s concern regarding native advertising is that if consumers are unable to recognize the material as advertising, they are likely to give greater weight to it or interact with the content in ways that they otherwise would not have interacted.

FTC’s technological growing capabilities. Brill concluded that part of the FTC’s continuing efforts in promoting transparency and enforcing against unfair and deceptive acts in the marketplace will include ensuring the FTC’s ability to keep up with the fast pace of technology in all areas that it covers, including ad technology. She cited efforts by the FTC in this area including: (1) bringing in-house leading researchers and technologists; (2) “beefing up” the front line staff’s technological capabilities; and (3) continuing to engage with universities, advocacy groups, think tanks, and other institutions on cutting edge issues.

News: Advertising ConsumerProtection FederalTradeCommissionNews