Industry groups: FCC's privacy proposal would 'seriously inhibit' data-driven advertising

Dive Brief:

  • In a recent blog post, the Federal Communications Commission (FCC) Chairman Tom Wheeler has put forth a new proposal requiring Internet service providers to obtain opt-in consent before using a customer’s Web browsing and app usage history, among other types of data.
  • A number of marketing industry groups are expressing concern over the potential impact of the proposed change, as customers’ Web browsing and app use history has traditionally been covered by opt-out consent. Limiting access to behavioral data could damage a thriving portion of the industry built around targeting ads for more relevant experiences, the groups argue in a letter to the FCC obtained by Marketing Dive
  • The proposed privacy rules, which focus on information collected from consumers when they use residential or mobile broadband connections provided by companies like Time Warner, will be considered at the commission’s upcoming monthly meeting on October 27. Search engines, social networks and others would not be included. 

Dive Insight:

Protecting consumer privacy is an important aspect of what the FCC does. As the digital landscape has grown and evolved quickly, regulators are working to stay on top of what is and what is not a threat to privacy.

While there is little dispute that data such as information about children as well as health and financial records — which are also covered by the proposal — is sensitive and should be subject to opt-in consent, targeting is one area where there is a lot of disagreement.

In comments filed with the FCC about the proposal, industry groups like the American Association of Advertising Agencies, American Advertising Federation, Association of National Advertisers and the Interactive Advertising Bureau insist the proposal would “upend” the Internet economy, which is in part supported by data-driven advertising. The groups also insist there is no record of consumer harm that would justify treating Web and app use history as sensitive.

FCC Chairman Wheeler argues that online activity can be pieced together with other information to paint a more revealing picture of customers than they realize.

“FCC regulations limit how your phone company can repurpose and resell what it learns about your phone activity without your consent. Similar rules don't exist for broadband service today,” Wheeler wrote in the blog post. “That’s a gap that must be closed — consumers who use the network of the 21st century deserve similar protections.”

The letter to the FCC shows that the industry groups are concerned that there has not been sufficient time for the public or the commission to consider the proposal. They also insist that the data-driven advertising economy benefits consumers and economic growth, Web browsing and app use data is not sensitive data, and industry self-regulation is already working, pointing to the Digital Advertising Alliance's AdChoices program.

“The current opt-out approach has helped fuel the successful commercial Internet, made the U.S. the global Internet leader, and continues to deliver extraordinary products and services to consumers,” the letter states. “We believe that mandating an opt-in requirement in these areas would seriously inhibit the ability of [Broadband Internet Access Services] to succeed in the developing marketplace.”

Providing services to marketers like the ability to target their customers with ads is an important revenue stream for broadband service provides like Comcast and Time Warner. If it became harder to target these users, marketers would likely take at least a portion of their business elsewhere, as reaching consumers with targeted and relevant ads is a key focus right now.

Filed Under: Marketing Tech Analytics