Lawmakers Call RTB An Unfair And Deceptive Business Practice In Letter To The FTC

It's ... complicated.

A bipartisan group of lawmakers is pushing the Federal Trade Commission to investigate the practice of real-time bidding. (Read the letter here.)

In a letter addressed to FTC Chairman Joseph Simons on Friday, the group, led by Sens. Ron Wyden, D-Ore., and Bill Cassidy, R-La., decries what it calls a “widespread privacy violations by companies in the advertising technology industry.”

Other signatories include Sen. Elizabeth Warren, D-Mass., and Democratic Reps. Anna Eshoo Zoe Lofgren of California. Eshoo and Lofgren introduced a sweeping privacy bill in the House late last year.

Ad tech companies, the letter says, “are selling private data about millions of Americans collected without their knowledge or consent from their phones, computers and smart TVs,” such as device IDs, cookies, location data, IP addresses, gender, age and other demographic data.

This argument is the same one at the heart of a series of complaints filed in Europe which allege that RTB is a violation under the General Data Protection Regulation, because there’s no way to collect informed consent for the sort of intricate data processing that takes place as part of every bid request in a real-time auction.

For more than a year, privacy advocates have been lodging simultaneous complaints on that theme with data protection authorities across the EU.

In May of 2019, for example, Ireland’s Data Protection Commission opened a formal investigation into whether Google’s ad exchange data-processing practices violate the GDPR.

Bid steamed

The letter to the FTC specifically highlights how exchanges will sometimes participate in RTB auctions solely for the purpose of collecting bidstream data “without ever intending to win the auction.”

“Hundreds of potential bidders receive this information, even though only one – the auction winner – will use it to deliver an advertisement,” the letter contends.

Some supply-side platforms have started cutting off exchanges that purposely bid low simply as a way to gain data rather than as a serious bidder in an auction.

But lawmakers are still incensed by the practice. “Few Americans realize that companies are siphoning off and storing that ‘bidstream data’ to compile exhaustive dossiers about them,” the letter declares.

Special ire is reserved for MobileWalla, a mobile data provider that used location data from phones to profile more than 17,000 Black Lives Matter protesters, according to a June BuzzFeed report, and created segments of evangelicals during the 2016 US presidential election by tracking their location in real time on Election Day.

“There is no effective way to control these tools absent intervention by regulators and Congress,” the letter goes on to say.

In closing, Wyden, Cassidy and co. urge the FTC to use its authority to determine whether ad tech companies and “their data broker partners” have violated federal laws prohibiting unfair and deceptive business practices.

And that, at least for now, is pretty much all that can be done at a federal level, absent a national privacy law, which has almost no chance of passing in this congress.

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