FTC Commissioner Advocates ‘Data Minimization’ In Advertising

What if all the privacy-safe, transparent, opt-in and consent-based digital advertising initiatives of the past few years turn out, a few years hence, to have been an entire waste of time?

It’s not such a far-flung possibility.

Privacy and consumer data solutions in the market have “hinged on the principles of notice and choice” for too long, said Rebecca Kelly Slaughter, one of five FTC commissioners, in a keynote last week at the BBB National Advertising Division conference.

“The notice-and-consent framework began as a sensible application of basic consumer protection principles to privacy—tell consumers what you are doing with their data, secure consent, and keep your promises,” according to the FTC’s transcript of the address.

It’s an intuitive solution, Slaughter said, but explaining data collection has little to no actual effect on the market. General web consumers do not truly read and understand click-through policy terms, nor do they have any bargaining power in the relationship, she said. And even if publisher opt-ins were meaningful, consumer data is shared by a large ecosystem of companies web users have no familiarity with.

Slaughter gave a number of examples of unaddressed problems with notice-and-consent frameworks as they exist in the market.

One is the unfettered overcollection of user data. Apps with no legitimate purpose for collecting contact book information or location data often collect that data anyway, and pass it to intermediaries. Some apps and ad units drain phones in the background and drive up mobile service rates. When consumer data breaches occur, this over-sharing of user data amplifies the consequences for victims.

Google Chrome’s Privacy Sandbox got a call-out during her presentation as an example of how privacy-focused solutions might only strengthen the position of large platform publishers.

She suggested that the market step back from “privacy” as the defining goal, and instead think more broadly about “data abuses.”

With that perspective, she said the tick-box standard for consent and transparency might be replaced by a “data minimization approach.”

Wouldn’t the data-driven advertising industry get crushed?

Well, yes. That’s actually one of Slaughter’s explicit pros for the paradigm shift.

“If companies cannot indiscriminately collect data, advertising networks could not build microtargeting profiles. Without the monetization aspect of microtargeting, the incentive to indiscriminately collect data falls away.”

Online advertising and free, ad-supported media or services will not go away, she said. Rather, the industry will revert to a former standard. Before the rise of ad network-fueled data collection, consumers traded their attention in exchange for seeing ads. They didn’t trade their consumer data in exchange for service.

“Targeting can be done contextually, triggered by the content to which an ad is attached, or even through broad and general categories,” she said. “These types of targeting do not raise the same concerns that surveillance advertising does.”

Slaughter’s keynote came with the standard upfront advisory that the views expressed were hers alone, and not that of the FTC or any other commissioners.

No legislation or regulation in the immediate future would require a shift from notification and consent to an approach of data minimization, as she classifies it.

But it’s potentially concerning for some data-driven advertising companies that the FTC commissioner would take such a strong approach to data-driven advertising. Much of the category falls under her definition of “surveillance advertising,” or collection and use of consumer data for advertising in exchange for free content and services.

“We are all surveilled, tracked, targeted – some of our communities more than others – and too often our choices are manipulated and limited,” Slaughter said. “This is not the result of the expression of informed preferences in a well-functioning marketplace.”

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