program areas Digital Consumer

Streaming Television Industry Conducting Vast Surveillance of Viewers, Targeting Them with Manipulative AI-driven Ad Tactics, Says New Report.Digital Privacy and Consumer Protection Group Calls on FTC, FCC and California Regulators to Investigate Connected TV PracticesContact: Jeff Chester, 202-494-7100 Jeff@democraticmedia.orgOctober 7, 2024Washington, DC. The Connected TV (CTV) video streaming industry in the U.S. operates a massive data-driven surveillance apparatus that has transformed the television set into a sophisticated monitoring, tracking and targeting device, according to a new report from the Center for Digital Democracy (CDD). How TV Watches Us: Commercial Surveillance in the Streaming Era documents how CTV captures and harvests information on individuals and families through a sophisticated and expansive commercial surveillance system, deliberately incorporating many of the data-gathering, monitoring, and targeting practices that have long undermined privacy and consumer protection online.The report highlights a number of recent trends that are key to understanding today’s connected TV operations:Leading streaming video programming networks, CTV device companies and “smart” TV manufacturers, allied with many of the country’s most powerful data brokers, are creating extensive digital dossiers on viewers based on a person’s identity information, viewing choices, purchasing patterns, and thousands of online and offline behaviors.So-called FAST channels (Free Advertiser-Supported TV)—such as Tubi, Pluto TV, and many others—are now ubiquitous on CTV, and a key part of the industry’s strategy to monetize viewer data and target them with sophisticated new forms of interactive marketing.Comcast/NBCU, Disney, Amazon, Roku, LG and other CTV companies operate cutting-edge advertising technologies that gather, analyze and then target consumers with ads, delivering them to households in milliseconds. CTV has unleashed a powerful arsenal of interactive advertising techniques, including virtual product placement inserted into programming and altered in real time. Generative AI enables marketers to produce thousands of instantaneous “hypertargeted variations” personalized for individual viewers. Surveillance has been built directly into television sets, with major manufacturers’ “smart TVs” deploying automatic content recognition (ACR) and other monitoring software to capture “an extensive, highly granular, and intimate amount of information that, when combined with contemporary identity technologies, enables tracking and ad targeting at the individual viewer level,” the report explains.Connected television is now integrated with online shopping services and offline retail outlets, creating a seamless commercial and entertainment culture through a number of techniques, including what the industry calls “shoppable ad formats” incorporated into programming and designed to prompt viewers to “purchase their favorite items without disrupting their viewing experience,” according to industry materials.The report profiles major players in the connected TV industry, along with the wide range of technologies they use to monitor and target viewers. For example:Comcast’s NBCUniversal division has developed its own data-driven ad-targeting system called “One Platform Total Audience.” It powers NBCU’s “streaming activation” of consumers targeted across “300 end points,” including their streaming video programming and mobile phone use. Advertisers can use the “machine learning and predictive analytics” capabilities of One Platform, including its “vast… first-party identity spine” that can be coupled with their own data sets “to better reach the consumers who matter most to brands.” NBCU’s “Identity graph houses more than 200 million individuals 18+, more than 90 million households, and more than 3,000 behavioral attributes” that can be accessed for strategic audience targeting.”The Walt Disney Company has developed a state-of the-art big-data and advertising system for its video operations, including through Disney+ and its “kids” content. Its materials promise to “leverage streaming behavior to build brand affinity and reward viewers” using tools such as the “Disney Audience Graph—consisting of millions of households, CTV and digital device IDs… continually refined and enhanced based on the numerous ways Disney connects with consumers daily.” The company claims that its ID Graph incorporates 110 million households and 260 million device IDs that can be targeted for advertising using “proprietary” and “precision” advertising categories “built from 100,000 [data] attributes.”Set manufacturer Samsung TV promises advertisers a wealth of data to reach their targets, deploying a variety of surveillance tools, including an ACR technology system that “identifies what viewers are watching on their TV on a regular basis,” and gathers data from a spectrum of channels, including “Linear TV, Linear Ads, Video Games, and Video on Demand.” It can also determine which viewers are watching television in English, Spanish, or other languages, and the specific kinds of devices that are connected to the set in each home.“The transformation of television in the digital era has taken place over the last several years largely under the radar of policymakers and the public, even as concerns about internet privacy and social media have received extensive media coverage,” the report explains. “The U.S. CTV streaming business has deliberately incorporated many of the data-surveillance marketing practices that have long undermined privacy and consumer protection in the ‘older’ online world of social media, search engines, mobile phones and video services such as YouTube.” The industry’s self-regulatory regimes are highly inadequate, the report authors argue. “Millions of Americans are being forced to accept unfair terms in order to access video programming, which threatens their privacy and may also narrow what information they access—including the quality of the content itself. Only those who can afford to pay are able to ‘opt out’ of seeing most of the ads—although much of their data will still be gathered.”The massive surveillance and targeting practices of today’s contemporary connected TV industry raise a number of concerns, the report explains. For example, during this election year, CTV has become the fastest growing medium for political ads. “Political campaigns are taking advantage of the full spectrum of ad-tech, identity, data analysis, monitoring and tracking tools deployed by major brands.” While these tools are no doubt a boon to campaigns, they also make it easy for candidates and other political actors to “run covert personalized campaigns, integrating detailed information about viewing behaviors, along with a host of additional (and often sensitive) data about a voter’s political orientations, personal interests, purchasing patterns, and emotional states. With no transparency or oversight,” the authors warn, “these practices could unleash millions of personalized, manipulative and highly targeted political ads, spread disinformation, and further exacerbate the political polarization that threatens a healthy democratic culture in the U.S.”“CTV has become a privacy nightmare for viewers,” explained report co-author Jeff Chester, who is the executive director of CDD. “It is now a core asset for the vast system of digital surveillance that shapes most of our online experiences. Not only does CTV operate in ways that are unfair to consumers, it is also putting them and their families at risk as it gathers and uses sensitive data about health, children, race and political interests,” Chester noted. “Regulation is urgently needed to protect the public from constantly expanding and unfair data collection and marketing practices,” he said, “as well as to ensure a competitive, diverse and equitable marketplace for programmers.”“Policy makers, scholars, and advocates need to pay close attention to the changes taking place in today’s 21st century television industry,” argued report co-author Kathryn C. Montgomery, Ph.D. “In addition to calling for strong consumer and privacy safeguards,” she urged, “we should seize this opportunity to re-envision the power and potential of the television medium and to create a policy framework for connected TV that will enable it to do more than serve the needs of advertisers. Our future television system in the United States should support and sustain a healthy news and information sector, promote civic engagement, and enable a diversity of creative expression to flourish.”CDD is submitting letters today to the chairs of the FTC and FCC, as well as the California Attorney General and the California Privacy Protection Agency, calling on policymakers to address the report’s findings and implement effective regulations for the CTV industry.CDD’s mission is to ensure that digital technologies serve and strengthen democratic values, institutions and processes. CDD strives to safeguard privacy and civil and human rights, as well as to advance equity, fairness, and community --30-- 

By Jeff ChesterKathryn C. Montgomery, PhD

Washington, DC                                                                                   February 15, 2024Digital marketers are unleashing a powerful and pervasive set of unfair and manipulative tactics to target and exploit children and teens.  Wherever they go online— social media, viewing videos, listening to music, or playing games—they are stealthily “accompanied” by an array of marketing practices designed to profile and manipulate them.  The Children and Teens’ Online Privacy Protection Act (COPPA 2.0) will provide urgently needed online privacy safeguards for children and teens and update legislation first enacted nearly 25 years ago.  The proposed new law will deliver real accountability to the digital media as well as help limit harms now experienced by children and teens online. For example, by stopping data targeted ads to young people under 16, the endless stream of information harvested by online companies will be significantly reduced. Other safeguards will limit the collection of personal information for other purposes. COPPA 2.0 will also extend the original COPPA law protections for youth from 12 to 16 years of age.  The proposed law also provides the ability to delete children’s and teen’s data easily. Young people will also be better protected from the myriad of methods used to profile them that has unleashed numerous discriminatory and other harmful practices.  An updated knowledge standard will make this legislation easier to enforce.We welcome the bipartisan updated text from co-sponsors Sen. Markey and Sen. Cassidy and new co-sponsors Chair Sen. Cantwell (D-WA) and Ranking Member Sen. Cruz (R-Texas). Katharina Kopp, Ph.D.Director of Policy, Center for Digital Democracy

Today a coalition of groups and individuals filed an Amicus Brief in support of the CAADCA, including Fairplay Inc., Center for Digital Democracy, Common Sense, 5Rights Foundation, Children’s Advocacy Institute, Accountable Tech, Beyond the Screen, Children & Screens, Design It For Us, The Tyler Clementi Foundation, Becca Schmill Foundation, Arturo Béjar, Frances Haugen.

The insatiable quest to acquire more data has long been a force behind corporate mergers in the US—including the proposed combination of supermarket giants Albertsons and Kroger. Both grocery chains have amassed a powerful set of internal “Big Data” digital marketing assets, accompanied by alliances with data brokers, “identity” management firms, advertisers, streaming video networks, and social media platforms. Albertsons and Kroger are leaders in one of the fastest-growing sectors in the online surveillance economy—called “retail media.” Expected to generate $85 billion in ad spending in the US by 2026, and with the success of Amazon as a model, there is a new digital “gold rush” by retailers to cash in on all the loyalty programs, sales information, and other growing ways to target their customers.Albertsons, Kroger, and other retailers including Walmart, CVS, Dollar General and Target find themselves in an enviable position in what’s being called the “post-cookie” era. As digital marketing abandons traditional user-tracking technologies, especially third-party cookies, in order to address privacy regulations, leading advertisers and platforms are lining up to access consumer information they believe comes with less regulatory risk. Supermarkets, drug stores, retailers and video streaming networks have massive amounts of so-called “first-party” authenticated data on consumers, which they claim comes with consent to use for online marketing. That’s why retail media networks operated by Kroger and others, as well as data harvested from streaming companies, are among the hottest commodities in today’s commercial surveillance economy. It’s not surprising that Albertsons and Kroger now have digital marketing partnerships with companies like Disney, Comcast/NBCUniversal, Google and Meta—to name just a few.The Federal Trade Commission (FTC) is currently reviewing this deal, which is a test case of how well antitrust regulators address the dominant role that data and the affordances of digital marketing play in the marketplace. The “Big Data” digital marketing era has upended many traditional marketplace structures; consolidation is accompanied by a string of deals that further coalesces power to incumbents and their allies. What’s called “collaboration”—in which multiple parties work together to extend individual and collective data capabilities—is now a key feature operating across the broader online economy, and is central to the Kroger/Albertsons transaction. Antitrust law has thus far failed to address one of the glaring threats arising from so many mergers today—their impact on privacy, consumer protection, and diversity of media ownership. Consider all the transactions that the FTC and Department of Justice have allowed in recent years, such as the scores of Google and Facebook acquisitions, and what deleterious impact they had on competition, data protection, and other societal outcomes.Under Chair Lina Khan, the FTC has awakened from what I have called its long “digital slumber,” moving to the forefront in challenging proposed mergers and working to develop more effective privacy safeguards. My organization told the commission that addressing the current role data-driven marketing plays in the Albertsons and Kroger merger, and how consolidating the two digital operations is really central to the two companies’ goals for the deal, must be part of its antitrust case.Kroger has been at the forefront of understanding how the sales and marketing of groceries and other consumer products have to operate simultaneously in-store and online. It acquired a leading “retail, data science, insights and media” company in 2015—which it named 84.51° after its geo coordinates in Cincinnati. Today, 84.51° touts its capabilities to leverage “data from over 62 million households” in influencing consumer buying behavior “both in-store and online,” using “first party retail data from nearly 1 of 2 US households and more than two billion transactions.” Kroger’s retail media division—called “Precision Marketing”—draws on the prowess of 84.51° to sell a range of sophisticated data targeting opportunities for advertisers, including leading brands that stock its in-store and online shelves. For example, ads can be delivered to customers when they search for a product on the Kroger website or its app; when they view digital discount coupons; and when customers are visiting non-Kroger-owned sites.These initiatives have created a number of opportunities for Kroger to make money from data. Last year, Precision Marketing opened its “Private Marketplace” service that enables advertisers to access Kroger customers via targeting lists of what are known as “pre-optimized audiences” (groups of consumers who have been analyzed and identified as potential customers for various products). Like other retailers, Kroger has a data and ad deal with video streaming companies, including Disney and Roku. Its alliance with Disney enables it to take advantage of that entertainment company’s major data-marketing assets, including AI tools and the ability to target consumers using its “250 million user IDs.”Likewise, the Albertsons “Media Collective” division promises advertisers that its retail media “platform” connects them to “over 100 million consumers.” It offers similar marketing opportunities for grocery brands as Kroger, including targeting on its website, app and also when its customers are off-site. Albertsons has partnerships across the commercial surveillance advertising spectrum, including with Google, the Trade Desk, Pinterest, Criteo and Meta/Facebook. It also has a video streaming data alliance involving global advertising agency giant Omnicom that expands its reach with viewers of Comcast’s NBCUniversal division, as well as with Paramount and Warner Bros./Discovery.Both Kroger and Albertsons partner with many of the same powerful identity-data companies, including data-marketing and cross-platform leaders LiveRamp and the Trade Desk. Through these relationships, the two grocery chains are connected to a vast network of databrokers that provide ready access to customer health, financial, and geolocation information, for example. The two grocery chains also work with the same “retail data cloud” company that further extends their marketing impact. Further compounding the negative competitive and privacy threats from this deal is its role in providing ongoing “closed-loop” consumer tracking to better perfect the ways retailers and advertisers measure the effectiveness of their marketing. They know precisely what you bought, browsed and viewed—in store and at home.Antitrust NGOs, trade unions and state attorneys-general have sounded the alarm about the pending Albertsons/Kroger deal, including its impact on prices, worker rights and consumer access to services. As the FTC nears a decision point on this merger, it should make clear that such transactions, which undermine competition, privacy, and expand the country’s commercial surveillance apparatus, should not be permitted.This article was originally published by Tech Policy Press.

Contact: David Monahan, Fairplay, david@fairplayforkids.orgContact: Jeff Chester, CDD, jeff@democraticmedia.org BREAKING: Advocates Decry Meta’s Attempt to Shut Down the FTCIn response to an order that would prohibit Meta from monetizing minors’ data, the social media company has filed a suit claiming the agency’s structure is unconstitutional. WASHINGTON, DC – THURSDAY, NOVEMBER 30, 2023 – Advocates for children and privacy condemned a lawsuit filed last evening by Meta against the Federal Trade Commission that seeks to shut the agency down by asserting the Commission’s structure is unconstitutional.  Meta’s suit comes in response to a proposed FTC order prohibiting Meta from monetizing children’s data for violating the Children’s Online Privacy Protection Act (COPPA) while already operating under a Consent Decree for multiple serious privacy violations. Earlier this week, Judge Timothy Kelly of the U.S. District Court for the District of Columbia denied a motion filed by Meta that claimed the FTC had no authority to modify its previous settlement. Now Meta is escalating its attacks on the Commission’s authority.Meta has posed a threat to the privacy and welfare of young people in the U.S. for many years, as it targeted them to further its data-driven commercial surveillance advertising system. Scandal after scandal has exposed the company’s blatant disregard for children and youth, with nearly daily headlines about its irresponsible actions coming from former employees turned whistleblowers and major multi-state and bi-partisan investigations of states attorneys-general.  Despite multiple attempts by regulators to contain Meta’s ongoing undermining of its user privacy, including through multiple FTC consent decrees, it is evident that a substantive remedy is required to safeguard US youth. Fairplay, the Center for Digital Democracy, and the Electronic Privacy Information Center (EPIC) have issued these comments on today's announcement of a Meta lawsuit against the Federal Trade Commission: Josh Golin, Executive Director, Fairplay: “While many have noted social media’s role in fueling the mental health crisis, the Federal Trade Commission has taken actual meaningful action to protect young people online by its order prohibiting serial privacy offender Meta from monetizing minor’s data. So it’s not surprising that Meta is launching this brazen attack on the Commission, especially given the company may have $200 billion in COPPA liability according to recently unsealed documents. Anyone who cares about the wellbeing of children– and the safety of American consumers – should rally to the defense of the Commission and be deeply concerned about the lengths Meta will go to preserve its ability to profit at the expense of young people.”  Katharina Kopp, Director of Policy, Center for Digital Democracy: “For decades Meta has put the maximization of profits from so-called behavioral advertising above the best interests of children and teens. Meta’s failure to comply repeatedly with its 2012 and 2020 settlements with the FTC, including its non-compliance with the federal children’s privacy law (COPPA), and the unique developmental vulnerability of minors, justifies the FTC to propose the modifications of Meta’s consent decree and to require it to stop profiting from the data it gathers on children and teens.  It should not surprise anybody then that Meta is now going after the FTC with its lawsuit. But this attack on the FTC is essentially an attack on common sense regulation to curtail out-of-control commercial power and an attack on our children, teenagers, and every one of us.” John Davisson, Director of Litigation, Electronic Privacy Information Center (EPIC): “It seems there's no legal theory, however far-fetched, that Meta won't deploy to avoid a full accounting of its harmful data practices. The reason is clear. A hearing before the FTC will confirm that Meta continues to mishandle personal data and put the privacy and safety of minors at risk, despite multiple orders not to do so. The changes FTC is proposing to Meta's exploitative business model can't come soon enough. We hope the court will reject Meta's latest attempt to run out the clock, as another federal court did just this week.” ### 

Contextual advertising is said to be privacy-safe because it eliminates the need for cookies, third-party trackers, and the processing of other personal data. Marketers and policy makers are placing much stock in the future of contextual advertising, viewing it as the solution to the privacy-invasive targeted advertising that heavily relies on personal data.However, the current state of contextual advertising does not look anything like our plain understanding of it in contrast to today's dominant mode of behavioral advertising: placing ads next to preferred content, based on keyword inclusion or exclusion. Instead, industry practices are moving towards incorporating advanced AI analysis of content and its classification, user-level data, and insights into content preferences of online visitors, all while still referring to “contextual advertising.” It is crucial for policymakers to carefully examine this rapidly evolving space and establish a clear definition of what “contextual advertising” should entail. This will prevent the emergence of toxic practices and outcomes, similar to what we have witnessed with surveillance-based behavioral marketing, from becoming the new normal.Let’s recall the reasons for the strong opposition to surveillance-based marketing practices so we can avoid those harms regarding contextual advertising. Simply put, the two main reasons are privacy harms and harms from manipulation. Behavioral advertising is deeply invasive when it comes to privacy, as it involves tracking users online and creating individual profiles based on their behavior over time and across different platforms and across channels. These practices go beyond individual privacy violations and also harm groups of people, perpetuating or even exacerbating historical discrimination and social inequities.The second main reason why many oppose surveillance-based marketing practices is the manipulative nature of commercial messaging that aims to exploit users’ vulnerabilities. This becomes particularly concerning when vulnerable populations, like children, are targeted, as they may not have the ability to resist sophisticated influences on their decision-making. More generally, the behavioral advertising business heavily incentivizes companies to optimize their practices for monetizing attention and selling audiences to advertisers, leading to many associated harms.New and evolving practices in contextual advertising should raise questions for policy makers. They should consider whether the harms we sought to avoid with behavioral marketing may resurface in these new advertising practices as well.Today’s contextual advertising methods are taking advantage of the latest analytical technologies to interpret online content so that contextual ads will likely soon be able to manipulate us just as behavioral ads can. Artificial intelligence (AI), machine learning, natural language processing models for tone and sentiment analysis, computer vision, audio analysis, and more are being used to consider a multitude of factors and in this way “dramatically improve the effectiveness of contextual targeting.” Gumgum’s Verity, for example, “scans text, image, audio and video to derive human-like understandings.” Attention measures – the new performance metric that advertisers crave – indicate that contextual ads are more effective than non-contextual ads. Moments.AI, a “real-time contextual targeting solution” by the Verve Group, for example, allows brands to move away from clicks and to “optimize towards consumer attention instead,” for “privacy-first” advertising solutions.Rather than analyzing one single URL or one article at a time, marketers can analyze a vast range of URLs and can “understand content clusters and topics that audiences are engaging with at that moment” and so use contextual targeting at scale. The effectiveness and sophistication of contextual advertising allows marketers to use it not just for enhancing brand awareness, but also for targeting prospects. In fact, the field of “neuroprogammatic” advertising “goes beyond topical content matching to target the subconscious feelings that lead consumers to make purchasing decisions,” according to one industry observer. Marketers can take advantage of how consumers “are feeling and thinking, and what actions they may or may not be in the mood to take, and therefore how likely are to respond to an ad. Neuroprogrammatic targeting uses AI to cater to precisely what makes us human.”These sophisticated contextual targeting practices may have negative effects similar to those of behavioral advertising, however. For instance, contextual ads on weight loss programs can be placed alongside content related to dieting and eating disorders due to its semantic, emotional, and visual content. This may have disastrous consequences similar to targeted behavioral ads aimed at teenagers with eating disorders. Therefore, it is important to question how different these practices are from individual user tracking and ad targeting. If content can be analyzed and profiled along very finely tuned classification schemes, advertisers don’t need to track users across the web. They simply need to track the content that will deliver the relevant audience and engage individuals based on their interests and feelings.Apart from the manipulative nature of contextual advertising, the use of personal data and associated privacy violations are also concerning. Many contextual ad tech companies claim to engage in contextual targeting “without any user data.” But, in fact, so-called contextual ad tech companies often rely on session data such as browser and page-level data, device and app-level data, IP address, and “whatever other info they can get their hands on to model the potential user,” framing it as “contextual 2.0.” Until recently, this practice might have been more accurately referred to as device fingerprinting. The claim is that session data is not about tracking, but only about the active session and usage at one point in time. No doubt, however, the line between contextual and behavioral advertising becomes blurry when such data is involved.Location-based targeting is another aspect of contextual advertising that raises privacy concerns. Should location-based targeting be considered contextual? Uber’s “Journey Ads” lets advertisers target users based on their destination. A trip to a restaurant might trigger alcohol ads; a trip to the movie theater might result in ads for sugary beverages. According to AdExchanger, Uber claims that it is not “doing any individual user-based targeting” and suggests that it is a form of contextual advertising.Peer 39 also includes location data in its ad-targeting capabilities and still refers to these practices as contextual advertising. The use of location data can reveal some of the most sensitive information about a person, including where she works, sleeps, socializes, worships, and seeks medical treatment. When combined with session data, the information obtained from sentiment, image, video, and location analysis can be used to create sophisticated inferences about individuals, and ads placed in this context can easily clash with consumer expectations of privacy.Furthermore, placing contextual ads next to user-generated content or within chat groups changes the parameters of contextual targeting. Instead of targeting the content itself, the ad becomes easily associated with an individual user. Reddit’s “contextual keyword targeting” allows advertisers to target by community and interests, discussing LGBTQ+ sensitive topics, for example. This is similar to the personalized nature of targeted behavioral advertising, and can thus raise privacy concerns.Cohort targeting, also referred to as “affinity targeting” or “content affinity targeting,” further blurs the line between behavioral and contextual advertising by combining content analytics with audience insights. “This bridges the gap between Custom Cohorts and your contextual signals, by taking learning from consented users to targeted content where a given Customer Cohort shows more engagement than the site average,” claims Permutive.Oracle uses various cohorts with demographic characteristics, including age, gender, and income, for example, as well as “lifestyle” and “retail” interests, to understand what content individuals are more likely to consume. While reputedly “designed for privacy from the ground up,” this approach allows Oracle to analyze what an audience cohort views and to “build a profile of the content types they’re most likely to engage with,” allowing advertisers to find their “target customers wherever they are online.” Playground XYZ enhances contextual data with eye-tracking data from opt-in panels, which measures attention and helps to optimize which content is most “eye-catching,” “without the need for cookies or other identifiers.”Although these practices may seem privacy neutral (relying on small samples of online users or “consented users”), they still allow advertisers to target and manipulate their desired audience. Message targeting based on content preferences of fine-tuned demographic characteristics (household income less than $20K or over $500K, for example) can lead to discriminatory practices and disparate impact that can deepen social inequities, just like the personalized targeting of online users.Hyper-contextual content analysis with a focus on measuring sentiment and attention, the use of session information, placing ads next to user-generated content as well as within interest group chats, and employing audience panels to profile content are emerging practices in contextual advertising that require critical examination. The touted privacy-first promise of contextual advertising is deceptive. It seems that contextual advertising is more manipulative, invasive of privacy, and likely to contribute to discrimination and perpetuate inequities among consumers than we all initially thought.What’s more, the convergence of highly sensitive content analytics with content profiling based on demographic characteristics (and potentially more), could result in even more potent digital marketing practices than those currently being deployed. By merging contextual data with behavioral data, marketers might gain a more comprehensive understanding of their target audience and develop more effective messaging. Additionally, we can only speculate about how modifications to the incentive structure for content delivery of audiences to advertisers might impact content quality.In the absence of policy intervention, these developments may lead to a surveillance system that is even more formidable than the one we currently have. Contextual advertising will not serve as a solution to surveillance-based “behavioral” marketing and its manipulative and privacy invasive nature, let alone the numerous other negative consequences associated with it, including the addictive nature of social media, the promotion of disinformation, and threats to public health.It is vital to formulate a comprehensive and up-to-date definition of contextual advertising that takes into consideration the adverse effects of surveillance advertising and strives to mitigate them. Industry self-regulation cannot be relied on, and legislative proposals do not adequately address the complexities of contextual advertising. The FTC’s 2009 definition of contextual advertising is also outdated in light of the advancements and practices described here. Regulatory bodies like the FTC must assess contemporary practices and provide guidelines to safeguard consumer privacy and ensure fair marketing practices. The FTC’s Children’s Online Privacy Protection Act rule update and its Commercial Surveillance and Data Security Rule provide opportunity to get it right.Failure to intervene may ultimately result in the emergence of a surveillance system disguised as consumer-friendly marketing. This article was originally published by Tech Policy Press.

 September 18, 2023 Comment on the 2023 Merger GuidelinesCenter for Digital DemocracyFTC-2023-0043 The Center for Digital Democracy (CDD) urges the U.S. Department of Justice (DoJ) and the Federal Trade Commission (FTC) to adopt the proposed merger guidelines.  The guidelines are absolutely necessary to ensure the U.S. operates a 21st century antitrust regime and doesn’t keep repeating the mistakes of the last several decades. Failures to understand and address contemporary practices, especially related to data assets, has brought us further consolidation in key markets, including in the digital media. Over rhe decades, CDD has been at the forefront of NGOs sounding the alarm on the consolidation of the digital marketing and advertising industry, including our opposition to such transactions as the Google/Doubleclick merger, Facebook/Instagram, Google/YouTube, Google/AdMob, Oracle/BlueKai and Datalogix, among others. Regulatory approval for these deals has accelerated the consolidation of the online media marketplace, where a tiny handful of companies—Alphabet (Google), Meta and Amazon—dominate the marketplace in terms of advertising revenues and online marketing applications. It has also helped deliver today’s vast commercial surveillance marketplace, with its unrelenting collection and use of information from consumers, small businesses and other potential competitors. The failure to address effectively the role that data assets and processing capabilities play in merger transactions has had unfortunate systemic consequences for the U.S. public. Privacy has been largely lost as a result, since by permitting these data-related deals both agencies signaled that policymakers approved unfettered data-driven commercial surveillance operations. It has also led to the widespread adoption by the largest commercial entities and brands, across all market verticals, to adopt the “Big Data” and personalized digital marketing applications developed by Google, Meta and Amazon—furthering the commercial surveillance stranglehold and helping fuel platform dominance. It has also had a profound and unfortunate impact on the structure of contemporary media, which have embraced the data-driven commercial surveillance paradigm with all its manipulative and discriminatory effects. In this regard, the failure to ensure meaningful antitrust policies has had consequences for the health of our democracy as well. The proposed guidelines should aid regulators better address specific transactions, their implications for specific markets, and the wider “network effects” that such digitally connected mergers trigger. An overall guideline for antitrust authorities should be an examination of the data assets assembled by each entity. Over the last half-decade or so, nearly every major company—regardless of “vertical” market served—has become a “big data” company, using both internal and external assets to leverage a range of data and decision intelligence designed to gather, process and make “actionable” data insights. Such affordances are regularly used for product development, supply, and marketing, among other uses. Artificial intelligence and machine learning applications are also “baked in” to these processes, extending the affordances across multiple operations. Antitrust regulators should inventory the data and digital assets of each proposed transaction entity, including data partnerships that extend capabilities; analyze them in terms of specific market capabilities and industry-wide standards; and review how a given combination might further anti-competitive effects (especially through leveraging data assets via cloud computing and other techniques). As markets further converge in the digital era, where, for example, data-driven marketing operations affect multiple sectors, we suggest that regulators will need to be both creative and flexible in addressing potential harms arising from cross-sectoral impacts. This point relates to Guideline 10 and “multi-sided” platforms. Regarding Guideline 3, we urge the agencies to review how both Alphabet/Google and Meta especially, as a result of prior merger approvals, have been able to determine how the broader online marketplace operates—creating a form of “coordination” problem. The advertising and data techniques developed by the two companies have had an inordinate influence over the development of online practices generally, in essence “dictating” formats, affordances, and market structures. By allowing Alphabet and Meta to grow unchecked, antitrust regulators have allowed the dog to wag the “long tail” of the digital marketplace. We also want to raise the issue of partnerships, since they are a very significant feature of the online market today. In addition to consolidation through acquisitions, companies have assembled a range of data and marketing partners who provide significant resources to these entities. This leveraging of the market through affiliates undermines competition (as well as compounding related issues involving privacy and consumer protection). The steady stream of acquisitions in rapidly evolving markets, such as “over-the-top” streaming video, that further entrenches dominant players and also creates new hurdles for potential competitors, raises the issue addressed in Guideline 8. Repeatedly, especially in digitally connected markets (such as media), there are daily acquisitions that clearly further consolidation. Today they go unchecked, something we hope will be reversed under the proposed paradigm here. Each proposed guideline is essential, in our view, to ensure that relevant information gathering and analysis are conducted for each proposed transaction. We are at a critical period of transition for markets, as data, digital media and technological progress (AI especially) continue to challenge traditional perspectives on dominance and competition. Broader network effects, regarding privacy, consumer protection and impact on democratic institutions should also be addressed by regulators moving forward. The proposed DoJ and FTC merger guidelines will provide critical guidance for the antitrust work to come.  

Leading studios, networks and production companies in Hollywood—such as Disney, Paramount, Comcast/NBCU, Warner Bros. Discovery and Amazon—know where their dollars will come from in the future. As streaming video becomes the dominant form of TV in the U.S., the biggest players in the entertainment industry are harvesting the cornucopia of data increasingly gathered from viewers. While some studio chiefs publicly chafe over the demands from striking actors and writers as being unrealistic, they know that their heavy investments in “adtech” will drive greater profitability. Streaming video data not only generates higher advertising and commerce revenues, but also serves as a valuable commodity for the precise online tracking and targeting of consumers.Streaming video is now a key part in what the Federal Trade Commission (FTC) calls the “commercial surveillance” marketplace. Data about our viewing behaviors, including any interactions with the content, is being gathered by connected and “smart” TVs, streaming devices such as Roku, in-house studio and network data mining operations, and by numerous targeting and measurement entities that now serve the industry. For example, Comcast’s NBCUniversal “One Platform” uses what it calls “NBCU ID”—a “first-party identifier [that] provides a persistent indicator of who a consumer is to us over time and across audiences.” Last year it rolled out “200 million unique person-level NBCU IDs mapped to 80 million households.” Disney’s Select advertising system uses a “proprietary Audience Graph” incorporating “100,000 attributes” to help “1800 turnkey” targeting segments. There are 235 million device IDs available to reach, says Disney, 110 million households. It also operates a “Disney Real-time Ad Exchange (DRAX), a data clean room and what it calls “Yoda”—a “yield optimized delivery allocation” empowering its ad server.Warner Bros. Discovery recently launched “WBD Stream,” providing marketers with “seamless access… to popular and premium content.” It also announced partnerships with several data and research companies designed to help “marketers to push consumers further down the path to purchase.” One such alliance involves “605,” which helps WBD track how effective its ads are in delivering actual sales from local retailers, including the use of set-top box data from Comcast as well as geolocation tracking information. Amazon has long supported its video streaming advertising sales, including with its “Freevee” network, through its portfolio of cutting-edge data tools. Among the ad categories targeted by Amazon’s streaming service are financial services, candy and beauty products. One advantage it touts is that streaming marketers can get help from “Amazon’s Ads data science team,” including an analysis of “signals in [the] Amazon Marketing Cloud.”Other major players in video streaming have also supercharged their data technologies, including Roku, Paramount, and Samsung, in order to target what are called “advanced audiences.” That’s the capability to have so much information available that a programmer can pinpoint a target for personalized marketing across a vast universe of media content. While subscription is a critical part of video revenues, programmers want to draw from multiple revenue streams, especially advertising. To help advance the ability of the TV business to have access to more thorough datasets, leading TV, advertising and measurement companies have formed the “U.S. Joint Industry Committee” (JIC). Warner Bros. Discovery, Fox, NBCU, TelevisaUnivision, Paramount, and AMC are among the programmers involved with JIC. They are joined by a powerhouse composed of the largest ad agencies (data holders as well), including Omnicom, WPP and Publicis. One outcome of this alliance will be a set of standards to measure the impact of video and other ads on consumers, including through the use of “Big Data” and cross-platform measurement.Of course, today’s video and filmed entertainment business includes more than ad-supported services. There’s subscription revenue for streaming–said to pass $50 billion for the U.S. this year– as well as theatrical release. But it’s very evident that the U.S. (as well as the global) entertainment business is in a major transition, where the requirement to identify, track and target an individual (or groups of people) online and as much offline as possible is essential. For example, Netflix is said to be exploring ways it can advance its own solution to personalized ad targeting, drawing its brief deal with Microsoft Advertising to a close. Leading retailers, including Walmart (NBCU) and Kroger (Disney), are also part of today’s streaming video advertising landscape. Making the connections to what we view on the screen and then buy at a store is a key selling point for today’s commercial surveillance-oriented streaming video apparatus. A growing part of the revenue from streaming will be commissions from the sale of a product after someone sees an ad and buys that product, including on the screen during a program. For example, as part of its plans to expand retail sales within its programming, NBCU’s “Checkout” service “identifies objects in video and makes them interactive and shoppable.”Another key issue for the Hollywood unions is the role of AI. With that technology already a core part of the advertising industry’s arsenal, its use will likely be integrated into video programming—something that should be addressed by the SAG-AFTRA and WGA negotiations.The unions deserve to capture a piece of the data-driven “pie” that will further drive industry profits. But there’s more at stake than a fair contract and protections for workers. Rather than unleashing the creativity of content providers who are part of a environment promoting diversity, equity and the public interest, the new system will be highly commercialized, data driven, and controlled by a handful of dominant entities. Consider the growing popularity of what are called “FAST” channels—which stands for “free ad supported streaming television.” Dozens of these channels, owned by Comcast/NBCU, Paramount, Fox, and Amazon, are now available, and filled with relatively low-cost content that can reap the profits from data and ads.The same powerful forces that helped undermine broadcasting, cable TV, and the democratic potential of what once was called the “information superhighway”—the Internet—are now at work shaping the emerging online video landscape. Advertising and marketing, which are already the influence behind the structure and affordances of digital media, are fashioning video streaming to be another—and critically important—component fostering surveillance marketing.The FTC’s forthcoming proposed rulemaking on commercial surveillance must address the role of streaming video. And the FCC should open up its own proceeding on streaming, one designed to bring structural changes to the industry in terms of ownership of content and distribution.  There’s also a role for antitrust regulators to examine the data partnerships emerging from the growing collaboration by networks and studios to pool data resources.  The fight for a fairer deal for writers and actors deserves the backing of regulators and the public. But a successful outcome for the strike should be just “Act One” of a comprehensive digital media reform effort. While the transformation of the U.S. TV system is significantly underway, it’s not too late to try to program “democracy” into its foundation. Jeff Chester is the executive director of the Center for Digital Democracy, a DC-based NGO that works to ensure that digital technologies serve and strengthen democratic values and institutions. Its work on streaming video is supported, in part, by the Rose Foundation for Communities and the Environment.This op-ed was initially published by the Tech Policy Press.