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Submitted by Charlotte Kress on September 17, 2018

On Thursday, September 13th , the FTC began its Hearings on Competition and Consumer Protection in the 21st Century. It was the first in a series of hearings on whether recent economic, business, technological, or international developments require changes to the FTC’s competition and consumer protection enforcement priorities. The series will provide the FTC with a range of viewpoints to evaluate current enforcement and policy in light of today’s digital landscape.

The focal points of the discussion were antitrust law, consumer protection, and consumer data regulation. Across all three categories, panelists highlighted the importance of clear policy goals to ensuring industry compliance, and supported the FTC’s endorsement of self-regulation.

The following is a summary of the points made by panelists in each of the three discussions:

A. Antitrust Law:

The fist topic of discussion was the current landscape of competition and consumer protection law and policy. It primarily focused on the current state of antitrust law. Panelists cautioned a return to the populist antitrust theories of the 1970’s, stating that a reliance on simple market concentration would be harmful to innovation. Antitrust law should not be used as a tool to dismantle the giant technology companies simply because of amorphous concepts of bigness and fairness.

Absent a legitimate antitrust concern, antitrust law is poorly designed to combat social issues like privacy, which are better suited to other forms of enforcement. The discussion clearly emphasized that politically or socially motivated enforcement is a misuse of antitrust law. Instead, antitrust law should focus on providing an adaptable framework and economic concepts for changing market conditions. They should be sufficiently flexible to apply across a broad area of industries. Such policy should be shaped from sophisticated data rather than broad, aggregated industry data.

Moreover, the FTC should continue its effort to harmonize international antitrust substance and procedure, such as by establishing a multilateral framework for antitrust cases. As globalization of antitrust continues, the FTC may need to go beyond soft international guidance to establish a basis for evaluating the actual implementation of such guidance.

B. Consumer Protection:

To help new entrants and multinational companies navigate the global patchwork of consumer protection and privacy laws in the U.S., regulatory guidance must clearly establish the rights of consumers and businesses. Harm to consumers should be interpreted to include the harms contemplated by common law privacy torts because of the abstract nature of the injuries that are made possible by emerging technology. The FTC should support self-regulatory efforts to enhance its mission of fighting fraud, deception, and unfair business practices. Self-regulation and industry standards incentivize businesses to do the right thing while remaining competitively viable. Further, self-regulation is cost-efficient for the FTC (the NAI was specifically highlighted as an example of strong self-regulation).

Consumer education is essential for navigating new marketplaces, and will ensure that the reasonable person standard is not diluted in light of unfamiliar, emerging markets. Similarly, the FTC should consider allocating more resources to its technological capacity, such as by adding a technology department to the agency.

C. Consumer Data Regulation:

The FTC must establish clear goals, values, and implementation measurements for privacy and data security policy. These policies must balance consumer sovereignty and privacy with marketplace efficiencies and the tremendous benefits that the digital economy has provided to consumers. Though the panelists disagreed as to what constitutes a privacy harm, each of them stressed the importance of articulating the particular harm that a policy is meant to prevent. Some thought that harm should be broadly interpreted to include risk and breach of consumer expectations, while others believed that the FTC should only involve itself when there is a substantial harm to consumers.

The panelists also compared U.S. privacy and consumer protection law to European law. The U.S. sectoral approach to privacy lacks consistency and business efficiencies compared to the EU’s comprehensive privacy law. Meaning that it is difficult to clearly articulate how data is protected in the U.S. because it often depends on who holds the data and what the data entails. The haphazard nature of this approach has lead California and the EU to take the helm of privacy regulation. Today, businesses focus their compliance efforts primarily on the GDPR and various California laws, such that they do not look to U.S. law more broadly as to how to build privacy programs and practices. However, commitments to privacy in the EU are typically only met when there is strong enforcement of those commitments. It remains to be seen whether European data protection authorities will truly be able to enforce GDPR for non-compliant businesses that are primarily located in the US.

The FTC has an opportunity to strike a balance between the less permissive European laws and the current scattered approach to data regulation in the US. The agency is well- positioned to do so by engaging the public in these hearings to thoughtfully and creatively keep pace with competition and consumer protection enforcement and policy in the 21st century.

Submitted by Grant Nelson on April 23, 2018

The move from traditional television to smart and connected televisions is accelerating. Few televisions sold today do not have some smart or connectivity feature, and digital advertisers and regulators alike have taken notice. With the growth of data-enabled television comes privacy concerns, and the NAI commenced a working group to develop standards for NAI members demonstrating responsible use of data.

Draft Guidance

Now, the NAI’s Advanced TV Working Group has published a draft for comment entitled “Guidance for Members: Viewed Content Advertising.” The draft is the result of many meetings, redlines, compromises, and discussions with privacy organizations and we are proud of the hard work of each participant.

This guidance does not weaken any existing guidance. It clarifies that the NAI’s Cross-Device Linking guidance applies to data collected from televisions as devices. It embraces the trend of advanced TV OSes converging with existing mobile operating systems. The Viewed Content Advertising guidance requires opt-in consent for technologies that collect all or nearly all of the viewing activity on a television, implementing the core principle enumerated Vizio.

What Now?

The 24 members of the Working Group have crafted every word carefully, but no one can see the whole picture. We invite NAI member companies to read the guidance and provide their constructive feedback via Grant Nelson (grant AT networkadvertising.org) before June 12th. The NAI has shared this and previous drafts, with several privacy organizations and looks forward to reading the suggestions for improvement.

Read the finalized Guidance.

Submitted by Matt Nichols on April 9, 2018

In late 2017, the NAI was given the opportunity to apply for a pilot survey program in order to run opinion polls and market research on internet users. With this chance to learn more about consumer opinions, we sent out a survey that obtained the responses of 10,000 U.S. consumers to find out more about what they think about online privacy, digital advertising, the ad-supported internet, and ad blocking. The survey was conducted January 29th to February 1st, 2018. 

NAI’s takeaways from the survey results

Our survey’s first question establishes the general level of concern respondents have about their privacy on the Internet. Whether the responses can be contributed to either recent high-profile data breaches, or to the growing national conversation surrounding privacy, “privacy” was stated to be at least “somewhat concern[ing]” for 85% of respondents.  Further, 50% of responses indicate that consumers are either “very” or “extremely” concerned about their privacy. In addition, 14% indicated that privacy was not a concern “at all”.  This indicates there continues to be a variety of attitudes about online privacy, but we must address the majority in the middle who are at least “somewhat concerned” about their privacy.  While this first question establishes that privacy is a concern for most respondents, subsequent questions and responses from the survey further clarifies this concern. 

The survey’s second question asks respondents to share what they felt was the primary reason for their privacy concern on the internet: 56% indicated that hackers were their top concern; a combined 15% said that data collection by either the U.S. or a foreign government was their top concern. As a whole, concerns about data collection by hackers or government entities attribute to 72% of responses to this question. 8% of users were most concerned about website and application publishers collecting data and 7% of users stated that data collection by advertising companies was their primary concern. 

The third question then shifts to help us better understand how consumers believe their access to online content should be financed. The results show overwhelmingly that respondents prefer their online content to be paid for by “Advertising” (67%), and interestingly this response was largely consistent across all age-groups. When this result is combined with the percentage of respondents indicating a preference for a “Donations” model (17%), the two responses account for 84% of all responses. This shows  an even clearer aversion by responders to pay directly for their online content. In fact, only 15% of responses indicated a preference for a subscription or microtransaction model. An interesting parallel to note is that 15% of respondents prefer a subscription or microtransaction model, which aligns with 15% of respondents who previously indicated their biggest privacy concern as AdTech companies and online publishers. 

Responses to the first three questions show individuals’ concern for their online privacy. But, while websites and AdTech play a role in this, albeit a minor one when compared to that of governments and hackers, question four adds further insight to this regarding choice.  When asked who should make the decision concerning opting a consumer out of targeted advertising, responders largely prefer themselves to be in control of this decision, with 79% indicating that “Individuals” should be in control. Interestingly, only 10% of respondents indicated that they prefer their browser to make such decisions on their behalf.

The survey results reveal that while some privacy concerns are associated with AdTech companies, this concern is not nearly as significant as those associated with hackers and government surveillance. But with that, the internet is largely ad-supported, and whether they are aware of this, U.S. consumers prefer their internet to continue to be ad-supported and show a clear disinterest in their content being made available only through subscriptions or microtransactions. But, when consumers are confronted with potential privacy enhancing measures, our survey shows that they want to make this choice themselves. This is a stern rebuttal to both device and browser manufacturers and governments making privacy decisions on consumers’ behalf.

Finally, while ad blocking is sometimes seen as evidence that consumers are taking privacy into their own hands, the final question of the survey shows that ad blockers are not primarily used as a privacy tool, but rather because consumers find ads annoying or because they cause websites to take too long to load and the effect that load time has on data usage.

We hope this survey, and its accompanying results, serve as a catalyst for discourse on not only our industry, but also the NAI’s role as a leading self-regulatory association. 

Full survey results can be found here.

"This research was made possible by Google Surveys, which donated use of its online survey platform. The questions and findings are solely those of the researchers and not influenced by any donation. For more information on the methodology, see the Google Surveys Whitepaper."

Submitted by NAI on February 14, 2018

A viewpoint from Ann Kennedy, Chief Product Officer of ShareThis

GDPR is Coming. Are You Ready For a New Era of Compliance?

The impending arrival of The General Data Protection Regulation (GDPR) from the European Union means that companies have to take consumer privacy more seriously than ever before.

But there's a problem. According to one recent survey of 500 cyber security professionals in the UK, Germany, France, and the US, a whopping 57 percent are concerned about compliance. That suggests many companies are still struggling to get prepared.

To retain consumers' trust at a time when privacy is top of mind and confusion surrounding the use of data in the online ecosystem is high, brands must take a tactical approach to communicating their position. They'll need to offer options that put their customers first. NAI membership and the adoption of self-regulatory principles lays the groundwork. To successfully navigate the new era of data protection, though, every company must adhere to new data collection and usage best practices.

With that in mind, here are three strategies from ShareThis for thriving in a post-GDPR world.

Embrace Transparency

When dealing with consumer privacy, transparency is critical. Organizations must describe their relationship with customer data in as much detail as possible, and in simple terms that consumers can fully grasp. The impetus for GDPR was to give consumers more control over their personal data, so you'll need to explain what you're doing to comply with data protection regulation legislation.

When updating our own privacy disclosures, conveying transparency and consumer-friendly content was paramount for ShareThis -- particularly since we were recently TAG certified against fraud. We made an effort to avoid industry and legal jargon, break down information into manageable parts, and associate each section of our disclosure with a visual icon for easy navigation.

In addition to clearly presenting your stance on privacy, joining the NAI is a great way to ensure you're doing everything you can to comply. Because self-regulatory organizations (SROs) are designed and dedicated to upholding consumer privacy and comprised of members rather than regulators, they can help websites and advertising companies prioritize transparency in the long-term. This unique positioning means SROs are well placed to draft robust and consumer-friendly regulations that keep pace with technology, without restricting innovation. By partnering with them you can put yourself ahead of the game.

Craft a Privacy Notice That Leaves No Stone Unturned

There's no doubt about it: the amount of privacy-related content that consumers are going to encounter in the coming months will be overwhelming. It's crucial, therefore, that your privacy notice clearly communicates your company's privacy policy to everyone who reads it.

What does a strong privacy notice look like? Among other things, it should provide an overview of:

  • The type and categories of data you collect, and who you collect it from
  • The purpose for your data collection practices, including how and why you use consumer data
  • Who has access to the data you collect, and the life cycle of that data (meaning how long it's available to you)
  • How and where the data is stored
  • What you're doing to safeguard customer data in order to protect against theft and fraud
  • Contact information that consumers can refer to should they have a question or complaint about your policy

Finally, be sure to put some thought into how you design your privacy notice. Don't fall victim to the "info dump." We recommend instead that companies offer simplified, topline content and hyperlink to additional information. This presents page visitors with the most important information up front and allows them to dig deeper for as much additional content as they need.

Adopt a Privacy by Design Framework

A concise privacy notice is key -- but that isn't where your commitment to GDPR should end. Moving forward, it's the companies that consider consumer privacy in all aspects of their work that will fare best.

A guiding principle for ShareThis is Privacy by Design, a method of engineering that considers privacy throughout the design process, not as an add-on. For example, implement technical measures in a way that protects privacy and maximizes data protection right from the start by considering users’ preferences. Assure that personal data is always processed in a way that respects consumers' privacy, and limit the number of departments that have access to your customers' personal data.

There are big changes coming -- but make some changes of your own, and you'll be ready for this new era of compliance. For more information on ShareThis visit our website.

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The views and opinions expressed in this blog are those of the authors and do not necessarily reflect those of the Network Advertising Initiative and/or any other contributor to this site.