As a partner at law firm Reed Smith with a focus on ad tech and emerging technology, Nikki Bhargava fields a lot of questions from clients that start with the word “how.”
How do you roll out AI-driven products while still maintaining privacy and security? How do you harmonize compliance with different privacy requirements across multiple states? How do you write disclosures that are simultaneously exhaustive, clear and understandable to the average consumer?
“Their questions are mostly very practical,” Bhargava said. “They’re just trying to understand what they need to do.”
Now that a new administration is on its way in, other questions are also popping up, including what Trump’s second term will mean for privacy legislation and what changes we may see in how the Federal Trade Commission approaches consumer protection.
“We anticipate that the FTC’s priorities will change from what we’ve seen over the past four years with its heavy focus on privacy and technology,” Bhargava said. “But it’s very difficult to say what direction the FTC will go in without knowing who the leadership will be – it’s something we’re watching closely.”
Bhargava spoke with AdExchanger about knowns – and unknowns – on privacy as we gear up for the next four years.
AdExchanger: I know it’s hard to predict, but how do you think the FTC’s priorities will evolve with the new administration?
NIKKI BHARGAVA: It’s a tough one. I can say with confidence that the activity level is likely to decrease. Then again, the current FTC is one of the most active we’ve ever had. To say anything else with certainty, we’ll have to see who gets appointed.
But the one thing we know for sure is that there will be more industry challenges in general to the FTC’s rules because of Loper. [In the Loper Bright case, the Supreme Court overruled the Chevron Doctrine. Chevron would allow courts to defer to a regulatory agency’s interpretation when a federal law was ambiguous.]
The current FTC has engaged in a lot of rulemaking, including exploring rules that crack down on “commercial surveillance” to try and make up for the lack of a federal privacy law. But privacy should be a bipartisan issue. Why hasn’t there been more progress toward that goal?
There are a few things standing in the way.
One is preemption of state privacy laws. Congress has been working on federal privacy legislation, but Congress is also made up of representatives from the states, many of which have been passing their own privacy laws – laws they don’t want to see sidelined.
The other big issue that’s been heavily contested is the private right of action [which would allow citizens to bring cases against businesses]. And then there’s the question of how privacy laws impact small businesses and the cost of compliance.
When these three things coalesce on a national level, it’s very difficult to work out.
You mentioned that Chevron means we’ll see more industry challenges of FTC rules. The FTC recently announced its final click-to-cancel rule, which makes it easier for people to end recurring subscriptions. The IAB and other trade groups are suing the FTC over this rule. Why are they so vocally against what seems like a rather consumer-friendly move?
Generally speaking, negative options [which is when someone’s silence or inaction is taken as implied consent] pose a headache for consumers. It’s harmful when they end up paying for a product or service they don’t want. The purpose of a subscription plan should be to make the consumer experience better.
But what the trade organizations have tried to highlight is that the rule treats every subscription or negative option in the exact same way, when not every program or industry is the same.
People don’t want to sign up for a free trial offer of something and then get charged every month because they don’t have the right information or an easy way to cancel. Then again, maybe they do want their skin care products refilled every month without having to ever think about it. The point is there needs to be a balance.
You co-lead the artificial intelligence group within Reed Smith’s Emerging Technologies practice. Are your clients worried about privacy risks related to AI?
One of the questions that comes up quite a bit is trying to understand how they can roll out AI-driven technologies and products that also maintain data privacy and security when there’s still so much uncertainty in terms of legislation in the US.
There isn’t necessarily a clear direction on what the requirements will be across all sectors.
Curious what you think will happen with the FTC’s ongoing case against Kochava for collecting and selling sensitive location data. It’s been dragging on for more than two years, and a new administration is coming.
I’d love to know exactly what the FTC will do come January, but we’ll just have to wait and see.
Regardless, any companies that collect and use precise geolocation data should remain cautious and be careful, particularly if they use it for targeted advertising.
But this also applies to all types of sensitive information. Sensitive data isn’t just an FTC concern. It’s a big concern at the state level, too.
This interview has been lightly edited and condensed.
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