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As technology becomes more widespread, the ability to collect data does as well. Here, AD checks in with the industry’s top lobbyists to see what bills they are following and how it could affect your business.
Digital content has provided publishers with new avenues to information collection, marketing and producing content for the right audiences at the right time. While these new technologies enable media professionals to better execute a brand strategy, lawmakers at times interpret the efforts of the industry as an issue of consumer protection. Currently, there are several legislative proposals being pushed by elected officials to limit the use of these new technologies—bills that industry experts say could be detrimental to the structure of targeted advertising.
“Privacy has been a hot issue and everyone has thrown a bill into the water this year. There are far more out there than last Congress,” says Tom Carpenter, American Business Media’s [ABM] legislative lobbyist with the firm Lexer and Walker. “ABM has been focused on this issue of privacy for several years now. We really had to change our semantics a little bit and make sure ABM members knew that privacy really means potential restrictions on data collection and use—that’s really why this is important to b-to-b media companies.”
Currently, there are several privacy bills in both the House of Representatives and the U.S. Senate that the group’s lobbyists are watching.
“We’ve been concerned about how a bill about consumer privacy includes entities that are interested in information about a person in a business capacity,” says Carpenter. “We’ve been concerned for a long time that Congress will not differentiate between the two—the consumer and business sides."
In the House of Representatives, some of the bills the media industry are watching include Rep. Bobby Rush’s Best Practices Act [H.R. 611]. This bill would require companies to obtain “opt-in” consent to disclose information to a third party, among other things. Rep. Jackie Speier’s Do Not Track Me Online Act [H.R. 654] would “direct the Federal Trade Commission to develop standards for a ‘Do Not Track’ mechanism that would allow individuals to choose upfront to opt out of the collection, use or sale of their online activities, and require covered entities to respect the consumer’s choice,” among other proposals.
While those bills could have detrimental impacts for the industry, Carpenter says right now ABM is “not too concerned about those given that they are minority bills and the majority is not putting them up [for a vote]. The main bills that we are watching are in the Senate—Senator Kerry and Senator McCain’s comprehensive privacy bill and then Senator Rockefeller has a do not track bill. The main show in the House will be whatever legislation Congresswoman Bono Mack will introduce. We ultimately think if something gets done it will be a Kerry-Rockefeller effort in the Senate and a Bono Mack in the House.”
Bills Your Business Should Be Watching
The bill Senators John Kerry and John McCain introduced in April is titled the Commercial Privacy Bill of Rights Act of 2011 [S. 799]. Some provisions include the right of notice, consent, access and correction of information for individuals. According to a news release from Sen. Kerry’s office, under the bill, “Collectors of information must provide clear notice to individuals on the collection practices and the purpose for such collection. Additionally, the collector must provide the ability for an individual to opt-out of any information collection that is unauthorized by the act and provide affirmative consent (opt-in) for the collection of sensitive personally identifiable information.”
For companies with existing relationships with customers, a business would have to provide notice to an individual of his or her ability to opt-out of the collection of information for the purpose of transferring it to third parties for behavioral advertising. Additionally, those that collect information would be required by law to provide individuals either the ability to access and correct their information, or to request cessation of its use and distribution.
Senator Jay Rockefeller’s bill [S.913] would “prescribe regulations regarding the collection and use of personal information obtained by tracking the online activity of an individual, and for other purposes.” Individuals would be able to opt-out across the board from any information collection.
According to the bill’s summary, Sen. Rockefeller’s bill sets up “regulations that establish standards for the implementation of a mechanism by which an individual can indicate whether he or she prefers to have personal information collected by providers of online services, including by providers of mobile applications and services; and [establishes] rules that prohibit such providers from collecting personal information on individuals who have expressed a preference not to have such information collected.”
Additionally, the Rockefeller bill requires rules that would allow “for the collection and use of personal information if: (1) the information is necessary to provide a service requested by the individual so long as identifying particulars are removed or the information is deleted upon the provision of such service; or (2) the individual receives clear, conspicuous, and accurate notice on, and consents to, such collection and use.”
Representative Mary Bono Mack is pushing the Secure and Fortify Data Act (SAFE Data Act) [H.R. 2577] which takes a wider stance on the issue of data. “The SAFE Data Act grants the FTC the ability to expand the definition of ‘personally identifiable information’ so long as this new data poses a reasonable risk of identity theft or would otherwise ‘result in unlawful conduct,’” a news release from her office says. This bill takes a heavier stance on e-commerce, online banking and trade in relation to data breaches from hacking, rather than data collection on individuals.
“The b-to-b media and information industry is like a grease that allows much of our economy to work more efficiently by providing critical information, knowledge and analysis that enable faster and more effective business decisions,” says Clark Pettit, president and CEO of ABM. “The challenge is that privacy and data legislation often arises from concerns over consumer protection for understandable reasons, but the proposed solutions are often not as appropriate for the business community where focused and custom information is often critical to and desired by our audiences. We need to ensure that any new legislation takes this into account and does not accidentally negatively inhibit this grease and subsequently the business audiences and the economy in turn.”
Pettit says the group is lobbying for a general business and b-to-b exclusion from the privacy rules being drafted in Congress to identify the differences between a consumer and a business professional consumer.
Privacy Versus Business Models
“We have to be very mindful of the work and activities of lawmakers, as well as the administration,” says Pam Horan, president of the Online Publishers Association [pictured]. “We’ve got to make sure we’re working closer with lawmakers so as they consider the potential for any sort of legislation that they also have, hopefully, an understanding about the business.”
Horan works to represent the interests of online publishers in Washington, D.C. She says there’s a very high risk for her group because of the digital medium her members work in—she strives to make elected officials understand what it means to be an online publisher.
“In the case of the online publishers, there’s a significant investment that they are making in the creation of content,” she says. “Last year we calculated that our members invested three quarters of a billion dollars in the creation of content. The majority of that is funded through advertising and part of what we want to make sure the lawmakers are understanding and have an appreciation of is what the fuel is that allows consumers to access so much of this content for free. It’s funded through advertising.”
Horan is also watching the bills being put forth by Representative Speier and Senator Rockefeller—the do-not-track arena, Horan says, is dangerous territory for her members. The remedy she puts forward is that of education.
“Where we have been focused is to help the lawmakers understand the role of cookies,” she says. “Cookies are not just for tracking—cookies are used to help us drive and manage our Web sites. It enables us to be able to understand when we have 100 calls to our homepage whether that is 100 people trying to access our homepage or it’s 10 people that had to hit the homepage up to 10 times to have it load. It’s the technical workings of Web sites and our ability to understand whether someone’s coming from outside the U.S., for example. If they are, then we don’t want to advertise a product that a pharmaceutical is selling if they don’t have approval outside the U.S.”
While the OPA is watching these pieces of legislation, the group also looks at these bills as works in progress—as a piece of legislation is pushed through each committee, the language changes and could provide a different outcome—something Horan says is key to these provisions.
“As we look at most of these bills we see they are a work in progress in terms of clarifying the definition around do not track in particular,” she says. “How is that going to be defined and ultimately what is the enforcement around that? The concept of do not track would require a persistent cookie to know that you don’t want to be tracked—right there, that breaks down the whole concept of do not track.”
To help work with lawmakers, both the OPA and ABM support self-regulation for privacy models.
“Our first position on all this legislation is that we really believe in self-regulation of the industry,” says Carpenter. “We think the industry has the tools and ability to communicate and to give users adequate notice and choice.”
The Worst Case Scenario
If industry self-regulation were to fall through and a harsh do not track bill became law within the United States, the consequences could be detrimental for publishers.
“Our concern is our advertisers are wanting to reach more and more targeted groups of people—they want to know what our readers are doing on a Web site,” says Francis Heid, vice president of media operations at Advanstar Communications. “They’re interested in seeing, for example, if they read an article on a given subject because they want to be able to deliver a message to the people that read the editorial on that subject.”
Heid says if tougher bills were to pass advertisers could look for other ways to deliver their targeted messages—ways that might not involve Advanstar.
Online content generation and the lobbying industry associations are doing on behalf of publishers are not exactly pocket change.
1. Amount invested in content creation by OPA Members last year: $750 Million
2. Between 1/1/10 and 6/30/11, three of the content industry associations spent significant resources on lobbying, not all of which was dedicated to privacy regulation:
• IAB: $270,000 on lobbying and related expenses.
• ABM: $210,000 on lobbying and related expenses.
• OPA: $1,040,000 on lobbying and related expenses.
Source: (1.) OPA estimate based on member spending; (2.) Lobbying reports from the Clerk of the House of Representatives—Legislative Resource Center and Secretary of the Senate—Office of Public Records.
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