CDD

Publishings

  • Considering Privacy Legislation in the context of contemporary digital data marketing practices Last week, the leading global advertisers, online platforms and data marketers gathered for the most important awards given by the ad industry—the “Cannes Lions.” Reviewing the winners and the “shortlist” of runners-up—competing in categories such as “Creative Data,” “Social and Influencer,” “Brand Experience & Activation,” “Creative Commerce” and “Mobile”—is essential to learn where the data-driven marketing business—and ultimately much of our digital experiences—is headed. An analysis of the entries reveals a growing role for machine learning and artificial intelligence in the creation of online marketing, along with geolocation tracking, immersive content and other “engagement” technologies. One takeaway, not surprisingly, is that the online ad industry continues to perfect techniques to secure our interest in its content so it can to gather more data from us.A U.S.-based company that also generated news during Cannes was The Trade Desk, a relatively unknown data marketing service that is playing a major role assisting advertisers and content providers to overcome any new privacy challenges posed by emerging or future legislation. The Trade Desk announced last week a further integration of its data and ad-targeting service with Amazon’s cloud AWS division, as well as a key role assisting grocer Albertsons new digital ad division. The Trade Desk has brokered a series of alliances and partnerships with Walmart, the Washington Post, Los Angeles Times, Gannett, NBC Universal, and Disney—to name only a few.There are several reasons these marketers and content publishing companies are aligning themselves with The Trade Desk. One of the most important is the company’s leadership in developing a method to collect and monetize a person’s identity for ongoing online marketing. “Unified ID 2.0” is touted to be a privacy-focused method that enables surveillance and effective ad targeting. The marketing industry refers to these identity approaches as “currencies” that enable the buying and selling of individuals for advertising. There are now dozens of identity “graph” or “identity spine” services, in addition to UDID, which reflect far-reaching partnerships among data brokers, publishers, adtech specialists, advertisers and marketing agencies. Many of these approaches are interoperable, such as the one involving Acxiom spin-off LiveRamp and The Trade Desk. A key goal, when you listen to what these identity brokers say, is that they would like to establish a universal identifier for each of us, to directly capture our attention, reap our data, and monetize our behavior. For the last several years, as a result of the enactment of the GDPR in the EU, the passage of privacy legislation in California, and the potential of federal privacy legislation, Google, Apple, Firefox and others have made changes or announced plans related to their online data practices. So-called “third party cookies,” which have long enabled commercial surveillance, are being abandoned—especially since their role has repeatedly raised concerns from data-protection regulators. Taking their place are what the surveillance marketing business believes are privacy-regulation-proof strategies. There are basically two major, but related, efforts that have been underway—here in the U.S. and globally.The first tactic is for a platform or online publisher to secure the use of our information through an affirmative consent process—called a “first-party” data relationship in the industry. The reasoning goes is that an individual wants an ongoing interaction with the site—for news, videos, groceries, drugs and other services, etc. Under this rationale, we are said to understand and approve how platforms and publishers will use our information as part of the value exchange. First-party data is becoming the most valuable asset in the global digital marketing business, enabling ongoing collection, generating insights, and helping maintain the surveillance model. It is considered to have few privacy problems. All the major platforms that raise so many troubling issues—including Google, Amazon, Meta/Facebook—operate through extensive first-party data relationships. It’s informative to see how the lead digital marketing trade group—the Interactive Advertising Bureau (IAB)—explains it: “ “first party data is your data…presents the least privacy concerns because you have full control over its collection, ownership and use.”The second tactic is a variation on the first, but also relies on various forms of identity-resolution strategies. It’s a response in part to the challenges posed by the dominance of the “walled garden” digital behemoths (Google, etc.) as well the need to overcome the impact of privacy regulation. These identity services are the replacement for cookies. Some form of first-party data is captured (and streaming video services are seen as a gold mine here to secure consent), along with additional information using machine learning to crunch data from public sources and other “signals.” Multimillion member panels of consumers who provide ongoing feedback to marketers, including information about their online behaviors, also help better determine how to effectively fashion the digital targeting elements. The Trade Desk-led UDID is one such identity framework. Another is TransUnion’s “Fabrick,” which “provides marketers with a sustainable, privacy-first foundation for all their data management, marketing and measurement needs.” Such rhetoric is typical of how the adtech/data broker/digital marketing sectors are trying to reframe how they conduct surveillance.Another related development, as part of the restructuring of the commercial surveillance economy, is the role of “data clean rooms.” Clean rooms enable data to be processed under specific rules set up by a marketer. As Advertising Agerecently explained, clean rooms enable first-party and other marketers to provide “access to their troves of data.” For Comcast’s NBCU division and Disney, this treasure chest of information comes from “set-top boxes, streaming platforms, theme parks and movie studios.” Various privacy rules are supposed to be applied; in some cases where they have consent, two or more parties will exchange their first-party data. In other cases, where they may not have such open permission, they will be able to “create really interesting ad products; whether it's a certain audience slice, or audience taxonomy, or different types of ad units….” As an NBCU executive explained about its clean room activity, “we match the data, we build custom audiences…we plan, activate and we measure. The clean room is now the safe neutral sandbox where all the parties can feel good sharing first party data without concerns of data leakage.”We currently have at least one major privacy bill in Congress that includes important protections for civil rights and restricts data targeting of children and teens, among other key provisions. It’s also important when examining these proposals to see how effective they will be in dealing with the surveillance marketing industry’s current tactics. If they don’t effectively curtail what is continuous and profound surveillance and manipulation by the major digital marketers, and also fail to rein in the power of the most dominant platforms, will such a federal privacy promise really deliver? We owe it to the public to determine whether such bills will really “clean up” the surveillance system at the core of our online lives.
    Jeff Chester
  • lootboxletterfull.pdf
  • Groups say FIFA: Ultimate Team preys on children’s vulnerability with loot boxes, “funny money" Contact:David Monahan, Fairplay david@fairplayforkids.orgJeff Chester, CDD jeff@democraticmedia.org; 202-494-7100Advocates call on FTC to investigate manipulative design abuses in popular FIFA gameGroups say FIFA: Ultimate Team preys on children’s vulnerability with loot boxes, “funny money”BOSTON and WASHINGTON, DC – Thursday, June 2, 2022 – Today, advocacy groups Fairplay and Center for Digital Democracy (CDD) led a coalition of 15 advocacy groups in calling on the Federal Trade Commission (FTC) to investigate video game company Electronic Arts (EA) for unfairly exploiting young users in EA’s massively popular game, FIFA: Ultimate Team. In a letter sent to the FTC, the advocates described how the use of loot boxes and virtual currency in FIFA: Ultimate Team exploits the many children who play the game, especially given their undeveloped financial literacy skills and poor understanding of the odds of receiving the most desirable loot box items.Citing the Norwegian Consumer Council’s recent report, Insert Coin: How the Gaming Industry Exploits Consumers Using Lootboxes, the advocates’ letter details how FIFA: Ultimate Team encourages gamers to engage in a constant stream of microtransactions as they play the game. Users are able to buy FIFA points, a virtual in-game currency, which can then be used to purchase loot boxes called FIFA packs containing mystery team kits; badges; and player cards for soccer players who can be added to a gamer’s team. In their letter, the advocates noted the game’s use of manipulative design abuses such as “lightning round” sales of premium packs to promote the purchase of FIFA packs, which children are particularly vulnerable to. The advocates also cite the use of virtual currency in the game, which obscures the actual cost of FIFA packs to adult users, let alone children. Additionally, the actual probability of unlocking the best loot box prizes in FIFA: Ultimate Team is practically inscrutable to anyone who is not an expert in statistics, according to the advocates and the NCC report. In order to unlock a specific desirable player in the game, users would have to pay around $14,000 or spend three years continuously playing the game. “By relentlessly marketing pay-to-win loot boxes, EA is exploiting children’s desire to compete with their friends, despite the fact that most adults, let alone kids, could not determine their odds of receiving a highly coveted card or what cards cost in real money. The FTC must use its power to investigate these design abuses and determine just how many kids and teens are being fleeced by EA.” Josh Golin, Executive Director, Fairplay“Lootboxes, virtual currencies, and other gaming features are often designed deceptively, aiming to exploit players’ known vulnerabilities. Due to their unique developmental needs, children and teens are particularly harmed. Their time and attention is stolen from them, they're financially exploited, and are purposely socialized to adopt gambling-like behaviors. Online gaming is a key online space where children and teens gather in millions, and regulators must act to protect them from these harmful practices.” Katharina Kopp, Deputy Director, Center for Digital Democracy“As illustrated in our report, FIFA: Ultimate Team uses aggressive in-game marketing and exploits gamers’ cognitive biases - adults and children alike - to manipulate them into spending large sums of money. Children especially are vulnerable to EA’s distortion of real-world value of its loot boxes and the complex, misleading probabilities given to describe the odds of receiving top prizes. We join our US partners in urging the Federal Trade Commission to investigate these troubling practices.” Finn Lützow-Holm Myrstad, Digital Policy Director, Norwegian Consumer Council"The greed of these video game companies is a key reason why we're seeing a new epidemic of child gambling in our families. Thanks to this report, the FTC has more than enough facts to take decisive action to protect our kids from these predatory business practices." Les Bernal, National Director of Stop Predatory Gambling and the Campaign for Gambling-Free Kids“Exploiting consumers, especially children, by manipulating them into buying loot boxes that, in reality, rarely contain the coveted items they are seeking, is a deceptive marketing practice that causes real harm and needs to stop. TINA.org strongly urges the FTC to take action.” Laura Smith, Legal Director at TINA.orgAdvocacy groups signing today's FTC complaint include Fairplay; the Center for Digital Democracy; Campaign for Accountability; Children and Screens: Institute of Digital Media and Child Development; Common Sense Media; Consumer Federation of America; Electronic Privacy Information Center (EPIC); Florida Council on Compulsive Gambling, Inc.; Massachusetts Council on Gaming and Health; National Council on Problem Gambling; Parent Coalition for Student Privacy; Public Citizen; Stop Predatory Gambling and the Campaign for Gambling-Free Kids; TINA.org (Truth in Advertising, Inc.); U.S. PIRG### lootboxletter_pr.pdf, lootboxletterfull.pdf
  • Press Statement regarding today’s FTC Policy Statement on Education Technology and the Children’s Online Privacy Protection ActJeff Chester, Executive Director, Center for Digital Democracy:Today, the Federal Trade Commission adopts a long overdue policy designed to protect children’s privacy. By shielding school children from the pervasive forces of commercial surveillance, which gathers their data for ads and marketing, the FTC is expressly using a critical safeguard from the bipartisan Children’s Online Privacy Protection Act (COPPA). Fairplay, Center for Digital Democracy, and a coalition of privacy, children’s health, civil and consumer rights groups had previously called on the commission to enact policies that make this very Edtech safeguard possible.   We look forward to working with the FTC to ensure that parents can be confident that their child’s online privacy and security is protected in—or out of-the classroom.  However, the Commission must also ensure that adolescents receive protections from what is now an omniscient and manipulative data-driven complex that profoundly threatens their privacy and well-being.
    boy in red hoodie wearing black headphones by Compare Fibre
  • 60 leading advocacy organizations say unregulated Big Tech business model is “fundamentally at odds with children’s wellbeing”Contact:David Monahan, Fairplay david@fairplayforkids.org(link sends e-mail)Jeff Chester, Center for Digital Democracy, jeff@democraticmedia.org(link sends e-mail), 202-494-7100Diverse coalition of advocates urges Congress to pass legislation to protect kids and teens online60 leading advocacy organizations say unregulated Big Tech business model is “fundamentally at odds with children’s wellbeing”BOSTON, MA and WASHINGTON, DC - March 22, 2022 – Congressional leaders in the House and Senate were urged today to enact much needed protections for children and teens online. In a letter to Senate Majority Leader Chuck Schumer, Senate Minority Leader Mitch McConnell, House Speaker Nancy Pelosi and House Minority Leader Kevin McCarthy, a broad coalition of health, safety, privacy and education groups said it was time to ensure that Big Tech can no longer undermine the wellbeing of America’s youth. The letter reiterated President Biden’s State of the Union address call for increased online protections for young people.In their letter, the advocates outlined how the prevailing business model of Big Tech creates a number of serious risks facing young people on the internet today, including mental health struggles, loss of privacy, manipulation, predation, and cyberbullying. The advocates underscored the dangers posed by rampant data collection on popular platforms, including algorithmic discrimination and targeting children at particularly vulnerable moments.  The reforms called for by the advocates include:Protections for children and teens wherever they are online, not just on “child-directed” sites;Privacy protections to all minors;A ban on targeted advertising to young people;Prohibition of algorithmic discrimination of children and teens;Establishment of a duty of care that requires digital service providers to make the best interests of children a primary design consideration and prevent and mitigate harms to minors;Requiring platforms to turn on the most protective settings for minors by default;Greater resources for enforcement by the Federal Trade Commission.United by the desire to see Big Tech’s harmful business model regulated, the advocates’ letter represents a landmark moment for the movement to increase privacy protections for children and teenagers online, especially due to the wide-ranging fields and focus areas represented by signatories. Among the 60 signatories to the advocates’ letter are: Fairplay, Center for Digital Democracy, Accountable Tech, American Academy of Pediatrics, American Association of Child and Adolescent Psychiatry, American Psychological Association, Center for Humane Technology, Common Sense, Darkness to Light, ECPAT-USA, Electronic Privacy Information Center (EPIC), National Alliance to Advance Adolescent Health, National Center on Sexual Exploitation, National Eating Disorders Association, Network for Public Education, ParentsTogether, Public Citizen, Society for Adolescent Health and Medicine, and Exposure Labs, creators of The Social Dilemma.Signatories on the need for legislation to protect young people online:“Congress last passed legislation to protect children online 24 years ago – nearly a decade before the most popular social media platforms even existed. Big Tech's unregulated business model has led to a race to the bottom to collect data and maximize profits, no matter the harm to young people. We agree with the president that the time is now to update COPPA, expand privacy protections to teens, and put an end to the design abuses that manipulate young people into spending too much time online and expose them to harmful content.” – Josh Golin, Executive Director, Fairplay.“It’s long past time for Congress to put a check on Big Tech’s pervasive manipulation of young people’s attention and exploitation of their personal data. We applaud President Biden’s call to ban surveillance advertising targeting young people and are heartened by the momentum to rein in Big Tech and establish critical safeguards for minors engaging with their products.” – Nicole Gill, Co-Founder and Executive Director, Accountable Tech.“Digital technology plays an outsized role in the lives of today’s children and adolescents, exacerbated by the dramatic changes to daily life experienced during the pandemic. Pediatricians see the impact of these platforms on our patients and recognize the growing alarm about the role of digital platforms, in particular social media, in contributing to the youth mental health crisis. It has become clear that, from infancy through the teen years, children’s well-being is an afterthought in developing digital technologies. Strengthening privacy, design, and safety protections for children and adolescents online is one of many needed steps to create healthier environments that are more supportive of their mental health and well-being.”– Moira Szilagyi, MD, PhD, FAAP, President, American Academy of Pediatrics.“Children and teens are at the epicenter of a pervasive data-driven marketing system that takes advantage of their inherent developmental vulnerabilities. We agree with President Biden: now is the time for Congress to act and enact safeguards that protect children and teens.  It’s also long overdue for Congress to enact comprehensive legislation that protects parents and other adults from unfair, manipulative, discriminatory and privacy invasive commercial surveillance practices.”  – Katharina Kopp, Ph.D. Policy Director, Center for Digital Democracy."President Biden's powerful State of the Union plea to Congress to hold social media platforms accountable for the ‘national experiment’ they're conducting on our kids and teens could not be more important. It is clear that young people are being harmed by these platforms that continue to prioritize profits over the wellbeing of its youngest users. Children and teens' mental health is at stake. Congress and the Administration must act now to pass legislation to protect children’s and teens' privacy and well-being online." – Jim Steyer, Founder and CEO, Common Sense.“Online protections for children are woefully outdated and it's clear tech companies are more interested in profiting off of vulnerable children than taking steps to prevent them from getting hurt on their platforms. American kids are facing a mental health crisis partly fueled by social media and parents are unable to go it alone against these billion dollar companies. We need Congress to update COPPA, end predatory data collection on children, and regulate design practices that are contributing to social media addiction, mental health disorders, and even death.”– Justin Ruben, Co-Founder and Co-Director, ParentsTogether."A business model built on extracting our attention at the cost of our well being is bad for everyone, but especially bad for children. No one knows this better than young people themselves, many of whom write to us daily about the ways in which Big Social is degrading their mental health. Left unregulated, Big Social will put profits over people every time. It's time to put our kids first. We urge Congress to act swiftly and enact reforms like strengthening privacy, banning surveillance advertising, and ending algorithmic discrimination for kids so we can begin to build a digital world that supports, rather than demotes child wellbeing." – Julia Hoppock, Partnerships Director, The Social Dilemma, Exposure Labs.# # #press_release_letter_to_congress_updated_embargo_to_3_22.pdf, letter_to_congress_re_children_online_3_22_22.pdf
  • Deal reflects Big Tech move to grab more data for omnipresent tracking & targeting Microsoft is rapidly expanding its surveillance advertising complex—first acquiring AT&T’s powerful Xandr targeting system last December, and adding a few weeks later the online gaming and eSports giant Activision Blizzard. The combination of Microsoft, AT&T and Activision assets raises a set of concerns regarding competition in the gaming and eSports marketplaces; privacy/surveillance protections, given the pervasive data gathering on users; and consumer protection, such as the methods that Microsoft and Activision (and other gaming services) implement to monetize players (including youth) through in-stream advertising and other marketing efforts. It also has implications for the ways we protect privacy in streaming media as well as in the evolving “metaverse.”The FTC must review this proposed deal, with the agency’s privacy and consumer-protection roles at the fore. This proposed Microsoft/Activision combination is emblematic of the ongoing transformation of how Big Tech companies track and target people across all their devices and applications. In order to continue its surveillance-advertising-based model, the online industry is undergoing a massive shift in tactics. It is pivoting to what’s called a “First-Party” data use strategy, claiming that it is obtaining our permission to continue to follow us online and deliver personalized ads and marketing. Getting our consent is the Big Tech plan to undermine any privacy legislation in the U.S. and elsewhere. For example, if this merger goes through, users of Activision games will likely be asked to consent to data collection and tracking on all of Microsoft’s services—such as Bing and LinkedIn. Given that Microsoft and Activision have already baked into its ad services relationships with Google and Meta/Facebook, this acquisition also illustrates the numerous deals that are aligned in all of these digital giants. Owning Xandr will bring a host of additional surveillance advertising resources to Microsoft’s already robust consumer-profiling and marketing infrastructure (including information contributed by AT&T’s own data practices). As explained in the data marketing newsletter AdExchanger, the Xandr and Activision acquisitions, if approved, will enable the leveraging of Microsoft’s already “strong first-party data set and monetize inventory across its wide portfolio of platforms, including its video game business, LinkedIn, Bing, Edge, Office 365, Skype and more.” Microsoft was already working with AT&T’s Xandr surveillance ad targeting apparatus, including for its gaming division. For example Xandr explains that its enables marketers to “Access real users in immersive and engaging environments” via its current ability to target people thru the Microsoft Advertising Exchange.Microsoft’s data targeting currently involves its “Microsoft Search Network,” which “sees 14.6 billion monthly searches globally across nearly 700 million users. Its Audience Network engages in an array of targeting tactics, including via leveraging a person’s identity, location, use of LinkedIn or other sites and a variety of “custom” approaches. Advertisers are able to “target audiences…across more than 1 billion Window devices.” Microsoft also offers its “Dynamics 365 Customer Insights” data platform to help marketers package their own data to use on its ad platform. Activision engages in an array of ad practices that raise concerns about unfairness and privacy, from in-stream ads to “rewarded videos” to product placement. As it explains, “Activision Blizzard Media connects brands and players with fan-first integrated advertising experiences across gaming and esports…. We create user-initiated in-game advertising experiences that allow brands to reward 245M+ players at key moments of gameplay to drive reach, frequency and engagement…. In-game User-initiated video ads allow brands to reward players at key moments of gameplay.”In this context, the FTC needs to review all the third-party tracking YouTube-related companies serving ads to Activision Blizzard Esports, including Google Campaign Manager 360, Flashtalking, Adform, Innovid and Extreme Reach. For example, Flashtalking explains that it helps gaming services “drive customer lifetime value…, understand who bought your games, how they interact with your brand, and which touch points drove engagement.” Innovid helps marketers create “accurate, persistent identity across devices.” For measurement, which is also a privacy issue long overlooked by previous FTC commissions, we have Activision partners that include Oracle’s MOAT, Kantor, Google Campaign Manager, and others. Everything from potato chips, candy and toilet paper is pushed via its gaming services. Activision uses neuromarketing and other research-related online ad industry tactics to figure out how best to deliver marketing to its users (including teens)—all of which have privacy and consumer protection implications. For decades, the Federal Trade Commission has approved Big Tech mergers without examining their impact on consumer protection and privacy (and also on competition—think of all the Google and Facebook takeovers the commission has okayed). This is unacceptable. Gaming is a hugely important market, with a set of data-gathering tactics that impact both consumers and competition. We expect this FTC to do much better than what we have witnessed for the past several decades. 
    Jeff Chester
  • Microsoft's further expansion into gaming, data gathering, digital marketing must trigger close scrutiny, inc. impacts on gamers, youth Microsoft’s proposed purchase of Activision-Blizzard raises serious red flags, Public Citizen, the Center for Digital Democracy, the Repair Association, the Communications Workers of America, and 11 additional groups said today in a letter to the Federal Trade Commission (FTC). The merger could give Microsoft an unfair amount of market power, threaten data privacy and security, limit consumers’ and independent business’ right to repair game consoles, and lead to union busting and wage suppression, the groups said.“If the FTC clears this merger, Microsoft will become the third largest gaming company in the world,” the letter reads. “The proposed merger fits an alarming pattern of concentration in the gaming industry over the past several years. Microsoft’s expanding role in the gaming market may result in the company using its leverage to raise subscription prices and limit options, among other possible consumer harms.”In January, Microsoft announced its deal to buy game publisher and developer Activision-Blizzard, subject to FTC approval. Activision is a titan of the gaming world, boasting 400 million monthly active users and incredibly popular titles like Call of Duty. Microsoft already is a major player in gaming as a hardware producer, platform provider, and game distributor. Combining the two companies could lessen competition in a market that’s seen a rash of consolidation in recent years.Workers at Activision have mobilized over the past year to shine a light on an abusive workplace culture. Now, as these workers seek to form a union to address their collective interests, the potential takeover by Microsoft threatens to further undermine workers’ rights and suppress wages.Microsoft’s move also has negative implications for data privacy and surveillance advertising. Adding Activision’s roster of game titles opens opportunities for advanced data collection, including the use of AI, influencers, neuromarketing, and other practices now used for its gaming operations.Additionally, the merger could strengthen Microsoft’s power to impinge on consumers’ right to repair their own video game equipment or to have it repaired by a service provider of their choice. Microsoft’s Xbox platform is already notoriously difficult to independently repair.
    Jeff Chester
  • The European Union’s efforts to legislate digital markets, specifically with its Digital Markets Act (DMA), make them fairer and more open, and benefit consumers. See PDF of full letter below. 20220203-letter-digital_markets_act-president-joe-r-biden.pdf
  • Documents 25 years of failures by agency to rein in practices that have eviscerated privacy and consumer protection in the U.S. and globallyThe Center for Digital Democracy (CDD) urges the Federal Trade Commission to develop a comprehensive set of rules to address a problem largely of its own making—the unfettered growth of commercial “surveillance marketing.” We submit this comment based on the nearly 25-year record of CDD and its key consumer-protection and privacy colleagues, providing detailed documentation and analysis of the need for the commission to regulate what is known as behavioral, programmatic and surveillance-based advertising.[1]The systemic and multiple failures of the FTC over the decades to respond meaningfully to the role and nature of online marketing—which has eviscerated the privacy rights of Americans (and consumers worldwide)—have enabled data-driven surveillance to thrive ubiquitously. Nearly every platform, application, device and experience in which Americans engage has been shaped by the commercial spying and manipulation apparatus that the commission has allowed to evolve and expand without constraint. In addition, by long ignoring the impact that the approval of countless mergers and acquisitions involving leading digital marketing companies had on commercial surveillance operations, the commission and Department of Justice have helped foster an online marketplace that is dominated by a few giants. There is no real competition in terms of how Americans are treated in the online surveillance marketing economy. Google, Meta/Facebook, Amazon and their partners set the global standards for how everyone else has to conduct data and digital marketing operations. FTC inaction on commercial surveillance practices has perversely promoted the widespread adoption of these practices. Today, nearly every major company is a big-data-driven information broker, surveillance advertiser, and real-time targeter of consumers.[2]At each critical moment—the expansion of behavioral advertising; the emergence of mobile marketing; the widespread adoption of programmatic, real-time, algorithmic-driven buying and selling of people for targeting ads; the deployment of omnichannel (cross-device) tracking and targeting; and the widespread integration of artificial intelligence and machine learning to deliver enhanced predictive targeting—the failure of the FTC to challenge the online data-driven model sent a message to the commercial surveillance industry, that it faced no serious regulatory or political consequences for its actions. This included regulatory immunity for the host of manipulative elements that are within the foundation of commercial surveillance, such as the deep analysis of a person’s emotions, interests, relationships, location, income, race, and ethnicity. By acting as an “enabler” to the forces that have shaped our online platform and experiences, the commission has done more than harm consumer protection, privacy and competition. It is also responsible for allowing the online platform marketplace to grow in ways that have undermined democracy, at once diminishing civic discourse, enabling efforts to promote voter suppression, and facilitating the communication and spread of hate speech and uncivil acts, among other major harms. FTC—“Eyes Wide Shut”: The commission has been engaged in risk-averse behaviors since the early 1980s, as a reaction to the successful attacks on it by the advertising lobby, which was able to convince Congress that the agency had engaged in regulatory excess when it tried to protect children from the harmful impact of marketing. The legacy of what is known as the “kidvid” episode, which resulted in a significant loss of its rulemaking authority, has permeated the agency’s operations for decades. It unleashed a “don’t ask, don’t tell” approach at the commission when it came to seriously confronting the impact of the digital marketplace on the public. Even when it came to children’s privacy—the one area where advocates had successfully convinced Congress to give the agency rulemaking authority—the agency repeatedly failed to enforce the law (allowing Google’s YouTube, for example, to openly violate COPPA for years, despite hearing repeatedly from advocates that it was doing so). The failure of the FTC to seriously implement its only congressionally mandated data-privacy law also sent a loud message to the data surveillance business that the commission wasn’t to be taken seriously.The commission has never condemned the online surveillance model developed by the digital marketing industry. It had countless opportunities to challenge behavioral ads, mobile and geo-location surveillance, social media profiling, and real-time buying and selling of individual profiles for the purposes of micro-targeted advertising.[3] In this comment, we will briefly highlight how the FTC has been an “enabler” of the unfettered operations of surveillance advertising, despite the many calls by CDD and its allies for the agency to act. The FTC and the Information Superhighway: At the earliest stages of what was then called the “Information Superhighway,” cyberspace, or the “National Information Infrastructure,” the FTC convened multiple “workshops” focused on privacy and related ecommerce issues. Reflecting the priorities of the then-Clinton administration, the commission spent several years imploring marketers to implement a set of “fair information practice” principles.[4]During this time, a number of consumer and privacy advocates urged the commission to call on Congress to regulate online data marketing practices. It was evident even then—especially to those who had tracked the online marketing business during the “dial-up” era, that privacy was not a priority at all for the marketing industry. The self-regulatory system was a total sham.[5]The lone exception to self-regulation was a data privacy law covering children 12 and under, an issue that this NGO’s predecessor group, the Center for Media Education (along with the Consumer Federation of America and the Institute for Public Representation, Georgetown University Law Center) championed—which led to the enactment of the Children’s Online Privacy Protection Act in 1998.[6]By the time the commission finally recommended (in 2000) that Congress enact privacy legislation “to supplement self-regulatory efforts and guarantee basic consumer protections,” the political winds had changed. There would be no further progress from Congress on privacy, given the clout of the big data marketing lobby.[7]Enabling behavioral advertising: In 2006, CDD and U.S. PIRG filed a complaint with the commission calling on it to use its Section 5 power to protect consumer privacy online. Specifically, we asked the commission to conduct an investigation of online advertising practices, focusing on five areas of concern: User Tracking/Web Analytics, Behavioral Targeting, Audience Segmentation, Data Gathering/Mining, and Industry Consolidation. As we explained in our petition, “Collectively, these five areas represented the foundations of an entirely new online environment, one in which engagement gives way to entrapment, in which personalization impinges on privacy.” The complaint discussed in detail all the methods used to track and target consumers, via their personal data, mobile phone use, and much more. It also urged action on the growing consolidation of what is now called the platform or ad-tech industry, explaining thatThe past few years have witnessed an alarming degree of consolidation in the Web analysis, advertising, and Internet data collection industries. The result of these transactions is not only the concentration of power in fewer hands, but also an increased ability, as our complaint has shown, for these companies to use their massive compilations of user data to violate consumer privacy in the U.S. Such consolidation within the core of the online marketing infrastructure also requires the FTC to conduct an anti-trust analysis to determine whether there is undue market power in this sector.[8]Ignoring the structure and consequences of behavioral advertising: In part due to the opposition to the proposed Google acquisition of DoubleClick that CDD, EPIC, U.S. PIRG and its allies in the U.S. and in the EU generated (discussed below), the commission convened several workshops, town halls and other forums focused on privacy and online data marketing. As CDD’s executive director, at the FTC’s 2007 “Ehavioral Advertising: Tracking, Targeting & Technology” event, warned, I just want to underscore that the future of online advertising has profound consequences for the future of our democracy and democracies everywhere. The kind of society we are creating right now for ourselves, and particularly our children, in many ways, is being shaped by the forces of advertising and marketing.... [W]e’ve watched since 2000 the ever-growing sophisticated array of techniques that had been deployed to track our every move, not just on individual websites, but through the development of new approaches called re-targeting where we were becoming digitally shadowed wherever we went, site to site…. [T]he time for fact-finding is over. The Commission is the designated Federal agency which is supposed to safeguard consumer privacy. It must act now to protect Americans from the unfair and deceptive practices that have evolved as part of what the industry calls the digital interactive marketing system.[9]Endorsing the monopolistic “Surveillance Marketplace”: In 2007, EPIC, U.S. PIRG, and CDD filed a complaint opposing plans by Google to acquire DoubleClick. As our initial filing explained, the acquisition, if approved, “will give one company access to more information about the Internet activities of consumers than any other company in the world.” In a supplemental petition, we explained that “the massive quantity of user information collected by Google coupled with DoubleClick’s business model of consumer profiling will enable the merged company to construct extremely intimate portraits of its users’ behavior.” We also identified a major conflict of interest at the commission regarding this deal. Needless to say, it was approved anyway, paving the way for the unprecedented role that Google now plays in our lives, with its domination of the commercial surveillance marketplace.[10] (CDD also raised objections to the Google/AdMob, Facebook/Instagram/WhatsApp, and other big-data-driven mergers that the FTC failed to address, again paving the way for the contemporary commercial surveillance apparatus).[11]Mobile surveillance: In 2009, CDD and U.S. PIRG urged the commission to “to protect consumers from a growing number of deceptive and unfair marketing practices and the resultant threats to consumer privacy that are a part of the rapidly growing U.S. mobile advertising landscape…. [M]obile devices, which know our location and other intimate details of our lives, are being turned into portable behavioral tracking and targeting tools….” The group’s FTC filing cited a Google official who called the mobile phone “the ultimate ad vehicle. It’s the first one ever in the history of the planet that people go to bed with. It’s ubiquitous across the world, across demographics, across age groups. People are giving these things to ever-younger children for safety and communication…. [I]t can know where you’ve been, where you’ve lingered, what store you stopped in, what car dealership you visited. It goes beyond any traditional advertising....” The complaint also discussed the myriad techniques, tactics, mergers and other critical issues to support the commission’s investigation and action.[12]Yet the FTC did nothing, and geolocation-based surveillance marketing has thrived, including via the leading platforms. Nor has the commission challenged cross-device tracking, a component of the surveillance marketing industry that financially benefited from the agency’s inability to protect consumer privacy, as unique identifiers are used to track and target the public.[13]Real-time programmatic, behavioral and algorithmic-based targeting: Also in 2009, CDD and U.S. PIRG submitted to the commission a comment as part of the agency’s “Privacy Roundtable” process, which noted thatToday, consumers online face the rapid growth and ever-increasing sophistication of the various techniques advertisers employ for data collection, profiling, and targeting across all online platforms. The growth of ad and other optimization services for targeting, involving real-time bidding on ad exchanges; the expansion of data collection capabilities from the largest advertising agencies (with the participation of leading digital media content and marketing companies); the increasing capabilities of mobile marketers to target users via enhanced data collection; and a disturbing growth of social media surveillance practices for targeted marketing are just a few of the developments the commission must address. But despite technical innovation and what may appear to be dramatic changes in the online data collection/profiling/targeting market, the commission must recognize that the underlying paradigm threatening consumer privacy online has been constant since the early 1990’s. So-called “one-to-one marketing,” where advertisers collect as much as possible on individual consumers so they can be targeted online, remains the fundamental approach. …Advertisers and marketers have developed an array of sophisticated and ever-evolving data collection and profiling applications, honed from the latest developments in such fields as semantics, artificial intelligence, auction theory, social network analysis, data-mining, and statistical modeling. Behavioral targeting is just one tool in the interactive advertisers’ arsenal.... We are being intensively tracked on many individual websites and across the Internet.[14]The filing called for action to address the buying and selling of individuals via online ad exchanges and giants such as Google; identified many other leading companies and practices; and explained how all of this was affecting mobile-device and social media users. It documented how self-regulation had been a failure, and how the “self-learning of contemporary interactive ad systems” threaten privacy and consumer welfare. Again, the FTC ignored these issues, enabling today’s programmatic (surveillance marketing) system to evolve unchallenged. Surveillance marketing of health behaviors, including through social media: In 2010, CDD and allied consumer and privacy groups filed a petition on the role that behavioral advertising, as well as manipulative ad tactics such as “neuromarketing,” play in the promotion of health and medical products. Google, Microsoft, and others were the subjects of this complaint. As we explained,A far-reaching complex of health marketers has unleashed an arsenal of techniques to track and profile consumers, including so-called medical “condition targeting,” to eavesdrop on their online discussions via social media data mining; to collect data on their actions through behavioral targeting; to use viral and so-called “word-of-mouth” techniques online to drive interest in prescriptions, over-the counter drugs, and health remedies; and to influence their subconscious perceptions via pharma-focused “neuromarketing…. Digital marketing raises many distinct consumer protection and privacy issues, including an overall lack of transparency, accountability and personal control, which consumers should have over data collection and the various interactive applications used to track, target, and influence them online (including on mobile devices). The use of these technologies by pharmaceutical, health product, and medical information providers that directly affect the public health and welfare of consumers requires immediate action.[15]As before, the FTC did nothing. Failures with Google and Facebook consent-decree enforcement: EPIC, CDD and allied consumer and privacy organizations, which helped bring cases against Google and Facebook, repeatedly told high-level commission staff and commissioners that these entities were routinely violating their respective consent decrees.[16] The failure of the commission to enforce its own decrees—reflecting the inability of the agency to analyze contemporary digital data and online marketing practices—permitted these companies, and the industry as a whole, to expand their surveillance capabilities still further.Neglecting communities of color: CDD also has repeatedly urged the commission to investigate and address how racial and ethnic data are used to target individuals and groups. For years, such data have been used to subject these communities to unfair treatment through predatory online marketing and other harmful practices. At best, the agency has given lip-service to these issues in the past, but has yet to take any meaningful action.[17]Failing our children, COPPA enforcement, and teens: CDD (along with Fair Play and Common Sense Media) is also filing comments in this docket on these issues. But we want to underscore that despite our repeated calls for action, the commission has never done anything to protect adolescents. Consequently, when someone turns 13 in the U.S., they are swept into the commercial surveillance marketing system that negatively affects every adult in the U.S.[18]Where we are today: Every day brings advances in the capabilities of commercial surveillance, led by the giant entities that dominate the marketplace, along with their affiliates. As we noted earlier, AI and machine-learning-based data analytic and targeting operations are routine for the commercial surveillance apparatus. And now the industry is poised to add what is known as “emotional intelligence,” a sophisticated new enhancement to ascertain and “understand how people feel in order to make AI more emotionally aware. There will be a shift from passive and grey interaction with AI, to an understanding of not only the cognitive, but also the emotive, channels of human interaction.”[19] Surveillance applications are also shaping the Internet of Things, the metaverse, and “over-the-top” streaming video as well.[20]We urge the commission to act on this petition, as well as calls by civil rights, consumer and privacy groups that it engage in a comprehensive rulemaking that will help promote competition, data protection, fairness and civil rights online. [1] We especially want to single out two individuals whose leadership role in all these years has been so critical, including with the FTC. Marc Rotenberg, who created and led the Electronic Privacy Information Center for decades, has been at the forefront of these and other key digital democracy issues since the earliest days of the internet. Ed Mierzwinski, now senior director, Federal Consumer Program, U.S. PIRG, understood that the same commercial forces that had undermined consumer rights in the “analog” world was doing so online as well. [2] So-called consumer data platforms and similar technologies permeate the corporate environment. See, for example, Mariah Cooper, “PepsiCo Launches Data Practice to Help Food and Beverage Retailers Grow,” Campaign, 9 Sept. 2021, /article/pepsico-launches-data-practice-to-help-food-and-beverage-retailers-grow/472436; Josh Wolf, “Where Does a Customer Data Platform Fit in With My AWS Data Lake?” AWS Blog, 13 May 2021, /blogs/apn/where-does-a-customer-data-platform-fit-in-with-my-aws-data-lake/; Wavicle Data Solutions, “Global QSR Uses Micro-segmentation to Improve Customer Engagement and Sales,” Dec. 2020, /wp-content/uploads/2020/12/Quick_Service_Restaurant_Customer_360_032421.pdf. [3] Federal Trade Commission, “Privacy in the Electronic Age,” The Privacy & American Business Conference, Washington, D.C., 1 Nov. 1995, /public-statements/1995/11/privacy-electronic-age.[4] Federal Trade Commission, “Staff Report: Public Workshop on Consumer Privacy on the Global Information Infrastructure” Dec. 1996, /reports/staff-report-public-workshop-consumer-privacy-global-information-infrastructure; Federal Trade Commission, About Privacy: Protecting the Consumer on the Global Information Infrastructure,” 8 Dec. 1998, /public-statements/1998/12/about-privacy-protecting-consumer-global-information-infrastructure; “Privacy in the Electronic Age.” See also Jeff Chester’s comments in U.S. Department of Commerce and Federal Trade Commission, “Public Workshop on Online Profiling, Washington, D C, 8 Nov. 1999, /sites/default/files/documents/public_events/online-profiling-public-workshop/online.pdf. [5] See especially the digital marketing industry fundamental paradigm laid out in Don Peppers and Martha Rogers, The One to One Future (New York: Crown Business, 1993); see also, Jeff Chester, Digital Destiny: New Media and the Future of Democracy (New York: The New Press, 2008). [6] See, for example, Federal Trade Commission, “Privacy Online: A Report to Congress,” June 1998. /sites/default/files/documents/reports/privacy-online-report-congress/priv-23a.pdf; Federal Trade Commission, “FTC Staff Sets Forth Principles For Online Information Collection From Children” 16 July 1997, /news-events/press-releases/1997/07/ftc-staff-sets-forth-principles-online-information-collection. To better understand the campaign developed to enact COPPA, including the industry pushback on teens, see Kathryn C. Montgomery, Generation Digital: Politics, Commerce, and Childhood in the Age of the Internet (Cambridge, MA: 2007). CDD pressed to have “cookies” and other identifiers included as personal information under COPPA. Jeff Chester, “Leading Consumer, Privacy, Child Advocacy & Public Health Groups Call on FTC for Stronger Children's Privacy Safeguards Under COPPA,” Center for Digital Democracy, 25 Sept. 2012, /content/leading-consumer-privacy-child-advocacy-public-health-groups-call-ftc-stronger-childrens. [7] See, for example, Marc Rotenberg, letter to Sen. Jay Rockefeller, Chairman of the Senate Committee of Commerce, Science and Transportation, et al, 5 May 2010, /wp-content/uploads/privacy/facebook/EPIC_FB_FTC_Complaint_Letter.pdf.[8] Jeff Chester and Ed Mierzwinski, “Complaint and Request for Inquiry and Injunctive Relief Concerning Unfair and Deceptive Online Marketing Practices,” Federal Trade Commission, 1 Nov.2006, /sites/default/files/FTCadprivacy_0_0.pdf. CDD and U.S. PIRG filed a supplemental petition a year letter, which included an analysis of advances in behavioral marketing, including through the DoubleClick Advertising Exchange, among others. While the commission staff and commissioners made various proposals, there was no real attempt to address the surveillance ad system. See, for example, , “A Preliminary FTC Staff Report on Protecting Consumer Privacy in an Era of Rapid Change: A Proposed Framework for Businesses and Policymakers,” Dec. 2010, /reports/preliminary-ftc-staff-report-protecting-consumer-privacy-era-rapid-change-proposed-framework.[9] Federal Trade Commission, “Ehavaorial Advertising: Tracking, Targeting & Technology,” meeting transcript, 1 Nov. 2007, pp. 35-36, /sites/default/files/documents/public_events/ehavioral-advertising-tracking-targeting-and-technology/71101wor.pdf. See also, Chester’s comment that “A very sophisticated commercial surveillance system has been put in place,” in Louise Story, “F.T.C. to Review Online Ads and Privacy,” New York Times, 1 Nov. 2007, /2007/11/01/technology/01Privacy.html. [10] Jeff Chester, “CDD, EPIC, USPIRG Opposition to Google/Doubleclick ‘Big Data’ Merger,” Center for Digital Democracy, 11 Sept. 2019, /article/cdd-epic-uspirg-opposition-googledoubleclick-big-data-merger; Roy Mark, “FTC Chair’s Impartiality Questioned,” eWeek, 13 Dec. 2007, /news/ftc-chair-s-impartiality-questioned/; “Conflict of Interest in Google-Doubleclick Merger Review,” EPIC.org, /documents/epic-v-federal-trade-commission/. [11] Tom Krazit, “Consumer Groups Urge Block of Google-AdMob Deal,” CNET, 28 Dec. 2009, /news/consumer-groups-urge-block-of-google-admob-deal/; Jeff Chester, “EPIC and CDD file ‘Unfair and Deceptive’ Practices Complaint at FTC on Facebook/WhatsApp Deal: WhatsApp Users Were Promised Privacy/Now They Will Have Facebook,” Center for Digital Democracy, 6 Mar. 2014, /content/epic-and-cdd-file-unfair-and-deceptive-practices-complaint-ftc-facebookwhatsapp-deal; Jeff Chester, “Big Data Gets Bigger: Consumer and Privacy Groups Call on FTC to Play Greater Role in Data Mergers/Investigation and Public Workshop Needed,” Center for Digital Democracy, 6 Feb. 2015, /content/big-data-gets-bigger-consumer-and-privacy-groups-call-ftc-play-greater-role-data-mergers.[12] “Consumer Groups Petition Federal Trade Commission to Protect Consumers from Mobile Marketing Practices Harmful to Privacy: Complaint Documents the Migration of Data Tracking, Profiling and Targeting to Mobile Phone Devices,” Center for Digital Democracy, 13 Jan. 2009, /mobile-marketing-harmful.[13] Center for Digital Democracy, “Ten Questions that the Federal Trade Commission Should Answer on Cross­ Device Online Tracking of Individuals,” /system/files/documents/public_comments/2015/11/00061-99851.pdf. For a current example of such tracking, see, for example, LiveRamp, “Measurement: Omnichannel Identity Linking,” /our-platform/cross-channel-measurement/omnichannel-identity-linking/. [14] Center for Digital Democracy and U.S. PIRG, “Cookie Wars, Real-Time Targeting, and Proprietary Self Learning Algorithms: Why the FTC Must Act Swiftly to Protect Consumer Privacy,” FTC Privacy Roundtables – Comment, Project No. P095416, 4 Nov. 2009, /sites/default/files/documents/public_comments/privacy-roundtables-comment-project-no.p095416-544506-00013/544506-00013.pdf. [15] Center for Digital Democracy, U.S. PIRG, Consumer Watchdog, and the World Privacy Forum, “Complaint, Request for Investigation, Public Disclosure, Injunction, and Other Relief: Google, Microsoft, QualityHealth, WebMD, Yahoo, AOL, HealthCentral, Healthline, Everyday Health, and Others Named Below,” FTC filing, 23 Nov. 2010, /sites/default/files/public/2015/101123publiccmptdigitaldemocracy.pdf. This complaint was one of several where CDD also placed a spotlight on social media marketing—another area in which the commission has repeatedly failed. For example, the complaint noted that “new surveillance tools have been developed to monitor conversations among social network users to identify what is being said about a particular issue or product. Marketers then work to insert brand-related messages into the social dialogue, often by identifying and targeting individuals considered brand ‘loyalists’ or ‘influencers….’ Increasingly, advertisers are using Facebook’s marketing apparatus—which is largely invisible to its users—…to … connect to the social communications of a very large pool of consumers.” [16] See, for example, Center for Digital Democracy, “Facebook’s Misleading Data and Marketing Policies and Practices,” Oct. 2013, /sites/default/files/field/public-files/2019/ftcfacebookdatapracticesfinal1013.pdf.[17] See for example, Jeff Chester, “Digital Target Marketing to African Americans, Hispanics and Asian Americans: A New Report,” Center for Digital Democracy,18 Feb. 2013, /content/digital-target-marketing-african-americans-hispanics-and-asian-americans-new-report; Center for Digital Democracy, “In the Matter of ‘Privacy and Security Implications of the Internet of Things,” FTC public workshop filing, 1 June 2013, /sites/default/files/documents/public_comments/2013/07/00006-86145.pdf; Jeff Chester, Kathryn Montgomery, and Lori Dorfman, “Alcohol Marketing in the Digital Age,” May 2010, /sites/default/files/documents/public_comments/alcohol-reports-project-no.p114503-00014%C2%A0/00014-58260.pdf.[18] “Children's Online Privacy.” C-Span, 17 Oct. 2018, /video/?453170-1/childrens-online-privacy; Center for Digital Democracy, “Digital Youth,” /projects/focus/digital-youth.[19] Yasmin Borain, “Marketing Trends for 2022: Technology, Artificial Intelligence and Internet of Things,” WARC, Nov. 2021, /content/article/warc-exclusive/marketing-trends-for-2022-technology-artificial-intelligence-and-internet-of-things/141212 (subscription required).[20] Hannah Murphy, “Facebook Patents Reveal How It Intends to Cash in on Metaverse: Meta Hopes to Use Tiny Human Expressions to Create Virtual World of Personalised Ads,” Financial Times, 17 Jan. 2022, /content/76d40aac-034e-4e0b-95eb-c5d34146f647 (subscription required).surveillanceadvertisingftccdd012622b.pdf
    Jeff Chester
  • Congresswomen Anna G. Eshoo (D-CA) and Jan Schakowsky (D-IL) and Senator Cory Booker (D-NJ) Introduce Bill to Ban Surveillance AdvertisingWashington, DC 1-18-2022“Identifying, tracking, discriminating, sorting, targeting, and manipulating online users lies at the heart of all that is toxic about today’s digital world. Surveillance advertising drives discrimination and compounds inequities, it destroys democratic institutions and rights, strengthens monopoly power of Big Tech platforms, and is harmful to children, teens, families, and communities. If enacted, the Banning Surveillance Advertising Act would put a stop to surveillance advertising and would be an important first step in building a digital world that is less toxic to our democracy, economy, and collective well-being,” said Katharina Kopp, Ph.D., Director of Policy for the Center for Digital Democracy.Click here for statements of support.Click here for bill text.Click here for a section-by-section summary.Click here for additional background.
  • "Surveillance" Marketing meets what Google calls "embedded finance" online [excerpt]USPIRG and CDD believe the U.S. is at an especially critical inflection point regarding digital platforms, digital payment services and online consumer protection: the pervasive tracking of data on individuals, families and groups, online and off; the nearly real-time ability to target a consumer with financial and other product offers regardless of where they are or device they use; and the development of a highly sophisticated and now machine-driven apparatus to deliver personalized marketing and communications, have all led to a largely unaccountable digital marketplace. A handful of digital platform giants and their partners stealthily operate what is known as a “surveillance marketing” system, which now pervades every aspect of our lives—increasingly affecting how the public engages with the financial services sector. As the Bureau’s Request for Comment illustrates, it is aware of the serious ramifications to consumers and small businesses as the U.S. accelerates its transition to what Google calls “embedded finance.” The leading platforms and online services, as they accelerate their roles as America’s new bankers and lenders, bring with them a host of critical issues that the Bureau must address. Moreover, the industry’s “closed-loop” business model, where platforms and online data and ad practices are able to operate in a non-transparent manner, which has already caused an uproar from global marketers, is poised to have even greater consequences as it assumes greater control over our daily financial experiences.  The growing role of platforms to leverage their market positions to shape the digital payment system is now disintermediating “banks and credit card companies from consumers.” These platforms are poised to dominate consumer and small business financial markets as much as they now do ecommerce, entertainment, and communications. In the process, these platforms and their online financial and other service partners will pose a series of threats. Their operating model, as we discuss below, engages in far-reaching forms of consumer manipulation, relying on a host of online marketing tactics designed to trigger a range of responses. There is a very real risk that without Bureau action, the digital payments and platform complex will aggressively push Americans to new levels of debt, as the Big Data and artificial intelligence (AI) apparatus now at the core of the consumer digital economy encourages impulse buying and other potentially consequential practices. These entities have so much information on individuals, communities and commerce, they easily dislodge smaller and locally-based businesses. Since data analyzed by the platforms is used to identify commercial opportunities across the range of their product offerings—which is basically making everything available for sale—a consumer will not be aware, let alone control, how this information can be used to target them with other products and services. As Alphabet/Google highlighted in a recent report on “embedded finance,” “online finance” has altered what people think is banking and managing finances: “now, most financial transactions happen via mobile apps, websites, email, text messages and other digital communications.” Google’s “white paper” suggests that embedded finance may be “the new gold rush” for financial services. Among the competitive benefits claimed by Google are that embedded finance “enables business to reach new customers at the moment when they need your services.” There is also an added “bonus”: “the data you collect from each transaction….”bigtechpaymentplatforms121921final.pdf
    Jeff Chester
  • Groups urge Congress to stop Big Tech’s manipulation of young people BOSTON – Thursday, December 2, 2021 – Today a coalition of leading advocacy groups launched Designed With Kids in Mind, a campaign demanding a design code in the US to protect young people from online manipulation and harm. The campaign seeks to secure protections for US children and teens similar to the UK’s groundbreaking Age-Appropriate Design Code (AADC), which went into effect earlier this year. The campaign brings together leading advocates for child development, privacy, and a healthier digital media environment, including Fairplay, Accountable Tech, American Academy of Pediatrics, Center for Digital Democracy, Center for Humane Technology, Common Sense, ParentsTogether, RAINN, and Exposure Labs, creators of The Social Dilemma. The coalition will advocate for legislation and new Federal Trade Commission rules that protect children and teens from a business model that puts young people at risk by prioritizing data collection and engagement.The coalition has launched a website that explains how many of the most pressing problems faced by young people online are directly linked to platform’s design choices. They cite features that benefit platforms at the expense of young people’s wellbeing, such as: Autoplay: increases time on platforms, and excessive time on screens is linked to mental health challenges, physical risks like less sleep, and promotes family conflict.Algorithmic recommendations: risks exposure to self-harm, racist content, pornography, and mis/disinformation.Location tracking: makes it easier for strangers to track and contact children.Nudges to share: leads to loss of privacy, risks of sexual predation and identity theft.The coalition is promoting three bills which would represent a big step forward in protecting US children and teens online: the Children and Teens’ Online Privacy Protection Act S.1628; the Kids Internet Design and Safety (KIDS) Act S. 2918; and the Protecting the Information of our Vulnerable Children and Youth (PRIVCY) Act H.R. 4801. Taken together, these bills would expand privacy protections to teens for the first time and incorporate key elements of the UK’s AADC, such as requiring the best interest of children to be a primary design consideration for services likely to be accessed by young people. The legislation backed by the coalition would also protect children and teens from manipulative design features and harmful data processing. Members of the coalition on the urgent need for a US Design Code to protect children and teens:Josh Golin, Executive Director, Fairplay:We need an internet that helps children learn, connect, and play without exploiting their developmental vulnerabilities; respects their need for privacy and safety; helps young children disconnect at the appropriate time rather than manipulating them into spending even more time online; and prioritizes surfacing high-quality content instead of maximizing engagement. The UK’s Age-Appropriate Design Code took an important step towards creating that internet, and children and teens in the US deserve the same protections and opportunities. It’s time for Congress and regulators to insist that children come before Big Tech’s profits.Nicole Gill, Co-Founder and Executive Director of Accountable Tech:You would never put your child in a car seat that wasn't designed for them and met all safety standards, but that's what we do every day when our children go online using a network of apps and websites that were never designed with them in mind. Our children should be free to learn, play, and connect online without manipulative platforms like Facebook and Google's YouTube influencing their every choice. We need an age appropriate design code that puts kids and families first and protects young people from the exploitative practices and the perverse incentives of social media.Lee Savio Beers, MD, FAAP, President of the American Academy of Pediatrics:The American Academy of Pediatrics is proud to join this effort to ensure digital spaces are safe for children and supportive of their healthy development. It is in our power to create a digital ecosystem that works better for children and families; legislative change to protect children is long overdue. We must be bold in our thinking and ensure that government action on technology addresses the most concerning industry practices while preserving the positive aspects of technology for young people.Jeff Chester, Executive Director, Center for Digital Democracy:The “Big Tech” companies have long treated young people as just a means to generate vast profits – creating apps, videos and games designed to hook them to an online world designed to surveil and manipulate them. It’s time to stop children and teens from being victimized by the digital media industry. Congress and the Federal Trade Commission should adopt commonsense safeguards that ensure America’s youth reap all the benefits of the online world without having to constantly expose themselves to the risks.Randima Fernando, Executive Director, Center for Humane Technology:We need technology that respects the incredible potential – and the incredible vulnerability – of our kids' minds. And that should guide technology for adults, who can benefit from those same improvements.Irene Ly, Policy Counsel, Common Sense:This campaign acknowledges harmful features of online platforms and apps like autoplay, algorithms amplifying harmful content, and location tracking for what they are: intentional design choices. For too long, online platforms and apps have chosen to exploit children’s vulnerabilities through these manipulative design features. Common Sense has long supported designing online spaces with kids in mind, and strongly supports US rules that would finally require companies to put kids’ well-being first.Julia Hoppock, The Social Dilemma Partnerships Director, Exposure Labs:For too long, Big Social has put profits over people. It's time to put our kids first and build an online world that works for them.Dalia Hashad, Online Safety Director, ParentsTogether: From depression to bullying to sexual exploitation, tech companies knowingly expose children to unacceptable harms because it makes the platforms billions in profit. It's time to put kids first.Scott Berkowitz, President of RAINN (Rape, Abuse & Incest National Network):Child exploitation has reached crisis levels, and our reliance on technology has left children increasingly vulnerable. On our hotline, we hear from children every day who have been victimized through technology. An age-appropriate design code will provide overdue safeguards for children across the U.S.launch_-_design_code_to_protect_kids_online.pdf
  • Time for the FTC to intervene as marketers create new ways to leverage our “identity” data as cookies “crumble” For decades, the U.S. has allowed private actors to basically create the rules regarding how our data is gathered and used online. A key reason that we do not have any real privacy for digital media is precisely because it has principally been online marketing interests that have shaped how the devices, platforms and applications we use ensnare us in the commercial surveillance complex. The Interactive Advertising Bureau (IAB) has long played this role through an array of standards committees that address everything from mobile devices to big data-driven targeting to ads harnessing virtual reality, to name a few. As this blog has previously covered, U.S. commercial online advertising, spearheaded by Google, the Trade Desk and others, is engaged in a major transformation of how it processes and characterizes data used for targeted marketing. For various reasons, the traditional ways we are profiled and tracked through the use of “cookies” are being replaced by a variety of schemes that enable advertisers to know and take advantage of our identities, but which they believe will (somehow!) pass muster with any privacy regulations now in force or potentially enacted. What’s important is that regardless of the industry rhetoric that these approaches will empower a person’s privacy, at the end of the day they are designed to ensure that the comprehensive tracking and targeting system remains firmly in place.As an industry trade organization, the IAB serves as a place to generate consensus, or agreed-upon formats, for digital advertising practices. To help the industry’s search for a way to maintain its surveillance business model approach, it has created what’s called “Project Rearc” to “re-architect digital marketing.” The IAB explains that Project Rearc “is a global call-to-action for stakeholders across the digital supply chain to re-think and re-architect digital marketing to support core industry use cases, while balancing consumer privacy and personalization.” It has set up a number of industry-run working groups to advance various components of this “re-architecting,” including what’s called an “Accountability Working Group.” Its members include Experian, Facebook, Google, Axel Springer, Nielsen, Pandora, TikTok, Nielsen, Publicis, Group M, Amazon, IABs from the EU, Australia, and Canada, Disney, Microsoft, Adobe, News Corp., Roku and many more (including specialist companies with their own “identity” for digital marketing approaches, such as Neustar and LiveRamp).The IAB Rearc effort has put out for “public comment” a number of proposed approaches for addressing elements of the new ways to target us via identifiers, cloud processing, and machine learning. Earlier this year, for example, it released for comment proposed standards on a “Global Privacy Platform;” an “Accountability Platform,” “Best Practices for User-Enabled Identity Tokens,” and a “Taxonomy and Data Transparency Standards to Support seller-defined Audience and Context Signaling.”Now it has released for public comment (due by November 12, 2021) a proposed method to “Increase Transparency Across Entire Advertising Supply Chain for New ID usage.” This proposal involves critical elements on the data collected about us and how it can be used. It is designed to “provide a standard way for companies to declare which user identity sources they use” and “ease ad campaign execution between advertisers, publishers, and their chosen technology providers….” This helps online advertisers use “different identity solutions that will replace the role of the third-party cookie,” explains the IAB. While developed in part for a “transparent supply chain” and to help build “auditable data structures to ensure consumer privacy,” its ultimate function is to enable marketers to “activate addressable audiences.” In other words, it’s all about continuing to ensure that digital marketers are able to build and leverage numerous individual and group identifiers to empower their advertising activities, and withstand potential regulatory threats about privacy violations.The IAB’s so-called public comment system is primarily designed for the special interests whose business model is the mass monetization of all our data and behaviors. We should not allow these actors to define how our everyday experiences with data operate, especially when privacy is involved. The longstanding role in which the IAB and online marketers have set many of the standards for our online lives should be challenged—by the FTC, Congress, state AGs and everyone else working on these issues.We—the public—should be determining our “digital destiny”—not the same people that gave us surveillance marketing in the first place.
    Jeff Chester
  • Blog

    The Big Data Merger Gold Rush to Control Your “Identity” Information

    Will the DoJ ensure that both competition and consumer protection in data markets are addressed?

    There is a digital data “gold rush” fever sweeping the data and marketing industry, as the quest to find ways to use data to determine a person’s “identity” for online marketing becomes paramount. This is triggered, in part, by the moves made by Google and others to replace “cookies” and other online identifiers with new, allegedly pro-privacy data-profiling methods to get the same results. We’ve addressed this privacy charade in other posts. In order to better position themselves in a world where knowing who we are and what we do is a highly valuable global currency, there are an increasing number of mergers and acquisitions in the digital marketing and advertising sector.For example, last week data-broker giant TransUnion announced it is buying identity data company Neustar for $3.1 billion dollars, to further expand its “powerful digital identity capabilities.” This is the latest in TransUnion’s buying spree to acquire data services companies that give it even more information on the U.S. public, including what we do on streaming media, via its 2020 takeovers of connected and streaming video data company Tru Optik (link is external) and the data-management-focused Signal. (link is external)In reviewing some of the business practices touted by TransUnion and Neustar, it’s striking that so little has changed in the decades CDD has been sounding the alarm about the impacts data-driven online marketing services have on society. These include the ever-growing privacy threats, as well as the machine-driven sorting of people and the manipulation of our behaviors. So far, nothing has derailed the commercial Big Data marketing.With this deal, TransUnion is obtaining a treasure trove of data assets and capabilities. For Neustar, “identity is an actionable understanding of who or what is on the other end of every interaction and transaction.” Neustar’s “OneID system provides a single lens on the consumer across their dynamic omnichannel journey.” This involves: (link is external) data management services featuring the collection, identification, tagging, tracking, analyzing, verification, correcting and sorting of business data pertaining to the identities, locations and personal information of and about consumers, including individuals, households, places, businesses, business entities, organizations, enterprises, schools, governments, points of interest, business practice characteristics, movements and behaviors of and about consumers via media devices, computers, mobile phones, tablets and internet connected devices.Neustar keeps close track of people, saying that it knows that “the average person has approximately 15 distinct identifiers with an average of 8 connected devices” (and notes that an average household has more than 45 such distinct identifiers). Neustar has an especially close business partnership with Facebook, (link is external) which enables marketers to better analyze how their ads translate into sales made on and spurred by that platform. Its “Customer Scoring and Segmentation” system enables advertisers to identify and classify targets so they can “reach the right customer with the right message in the right markets.” Neustar has a robust data-driven ad-targeting system called AdAdvisor, which reaches 220 million adults in “virtually every household in the U.S.” AdAdvisor (link is external) “uses past behavior to predict likelihood of future behavior” and involves “thousands of data points available for online targeting” (including the use of “2 billion records a month from authoritative offline sources”). Its “Propensity Audiences” service helps marketers predict the behaviors of people, incorporating such information (link is external) as “customer-level purchase data for more than 230 million US consumers; weekly in-store transaction data from over 4,500 retailers; actual catalog purchases by more than 18 million households”; and “credit information and household-level demographics, used to build profiles of the buying power, disposable income and access to credit a given household has available.” Neustar offers its customers the ability to reach “propensity audiences” in order to target such product categories as alcohol, automotive, education, entertainment, grocery, life events, personal finance, and more. For example, companies can target people who have used their debit or credit cards, by the amount of insurance they have on their homes or cars, by the “level of investable assets,” including whether they have a pension or other retirement funds. One also can discover people who buy a certain kitty litter or candy bar—the list of AdAdvisor possibilities is far-reaching.Another AdAdvisor application, “ElementOne,” (link is external) comprises 172 segments that can be “leveraged in real time for both online and offline audience targeting.” The targeting categories should be familiar to anyone who is concerned about how groups of people are characterized by data-brokers and others. For example, one can select “Segment 058—high income rural younger renters with and without children—or “Segment 115—middle income city older home owners without children; or any Segment from 151-172 to reach “low income” Americans who are renters, homeowners, have or don’t have kids, live in rural or urban areas, and the like.Marketers can also use AdAdvisor to determine the geolocation behaviors of their targets, through partnerships that provide Neustar with “10 billion daily location signals from 250+ million opted-in consumers.” In other words, Neustar knows whether you walked into that liquor store, grocery chain, hotel, entertainment venue, or shop. It also has data on what you view on TV, streaming video, and gaming. And it’s not just consumers who Neustar tracks and targets. Companies can access its “HealthLink Dimensions Doctor Data to target 1.7 million healthcare professionals who work in more than 400 specialties, including acute care, family practice, pediatrics, cardiovascular surgery.”TransUnion is already a global data and digital marketing powerhouse, with operations in 30 countries, 8,000 clients that include 60 of the Fortune 100. What is calls its “TruAudience Marketing Solutions (link is external)” is built on a foundation of “insight into 98% of U.S. adults and more than 127 million homes, including 80 million connected homes.” Its “TruAudience Identity” product provides “a three-dimensional, omnichannel view of individuals, devices and households… [enabling] precise, scalable identity across offline, digital and streaming environments.” It offers marketers and others a method to secure what it terms is an “identity resolution,” (link is external) which is defined as “the process of matching identifiers across devices and touchpoints to a single profile [that] helps build a cohesive, omnichannel view of a consumer….”TransUnion, known historically as one of the Big Three credit bureaus, has pivoted to become a key source for data and applications for digital marketing. It isn’t the only company expanding what is called an “ID Graf (link is external)”—the ways all our data are gathered for profiling. However, given its already vast storehouse of information on Americans, it should not be allowed to devour another major data-focused marketing enterprise.Since this merger is now before the U.S. Department of Justice—as opposed to the Federal Trade Commission—there isn’t a strong likelihood that in addition to examining the competitive implications of the deal, there will also be a focus on what this really means for people, in terms of further loss of privacy, their autonomy and their potential vulnerability to manipulative and stealthy marketing applications that classify and segment us in a myriad of invisible ways. Additionally, the use of such data systems to identify communities of color and other groups that confront historic and current obstacles to their well-being should also be analyzed by any competition regulator.In July, the Biden Administration issued (link is external) an Executive Order on competition that called for a more robust regime to deal with mergers such as TransUnion and Neustar. According to that order, “It is also the policy of my Administration to enforce the antitrust laws to meet the challenges posed by new industries and technologies, including the rise of the dominant Internet platforms, especially as they stem from serial mergers, the acquisition of nascent competitors, the aggregation of data, unfair competition in attention markets, the surveillance of users, and the presence of network effects.”We hope the DOJ will live up to this call to address mergers such as this one, and other data-driven deals that are a key reason why these kind of buyouts happen with regularity. There should also be a way for the FTC—especially under the leadership of Chair Lina Khan—to play an important role evaluating this and similar transactions. There’s more at stake than competition in the data-broker or digital advertising markets. Who controls our information and how that information is used are the fundamental questions that will determine our freedom and our economic opportunities. As the Big Data marketplace undergoes a key transition, developing effective policies to protect public privacy and corporate competition is precisely why this moment is so vitally important.
    Jeff Chester
    three person pointing the silver laptop computer by John Schnobrich
  • Online grocery shopping became a pandemic response necessity for those who could afford it, with revenues to exceed $100 billion (link is external) in 2021. Leading supermarket chains such as Kroger, big box stores like Walmart, online specialist companies such as Instacart, and the ubiquitous Amazon, have all experienced greater demand from the public to have groceries ordered and then quickly delivered or available for pick up. The pandemic has spurred “record” (link is external) downloads of grocery shopping apps from Instacart, Walmart Grocery and Target, among others. Consequently, this marketplace is now rapidly expanding its data collection and digital marketing operations, to generate significant revenues from advertisers and food and beverage brand sponsors.So it’s not a surprise that Instacart’s new (link is external) CEO comes from Facebook (link is external), and the company has also just hired that social network’s former head of advertising. Walmart, Kroger, Amazon and others are also further adding (link is external) adtech and data marketing experts. There has been a spate of announcements involving new grocery-focused alliances to improve the role digital data play in marketing and sales, including by Albertson’s (involving Google (link is external)) (link is external) and Hy-Vee (link is external) (also with Google). Albertson’s (link is external) (which includes the Safeway, Vons and Jewel-Osco divisions) deal with Google is designed to include “shoppable digital maps to make it easier for consumers to find and purchase products online; AI-powered conversation commerce” technologies for shopping, and “predictive grocery list building….” Similarly, Hy-Vee’s work with the Google Cloud will help enable “predictive (link is external) shopping carts,” among other services. (Hy-Vee is also one of the supermarket chains participating in the USDA’s online SNAP (link is external) pilot project, raising questions regarding how its alliance with Google will impact the privacy and well-being of people enrolled in SNAP).All the data that is flowing into these companies, how it is being analyzed, its use by advertisers and product sponsors, and how it impacts the products we see and purchase, should all be subject to scrutiny from consumer protection and privacy regulators.A good example is Instacart. Its Instacart (link is external) Advertising service allows brands to pay to become “featured products” and more (link is external). Featured Product ads are a form of paid search advertising. As Instacart tells its clients, if a consumer is searching (link is external)for “chocolate ice cream” or just “ice cream,” and you have bought such ads, “your product can appear as one of the first products in the search result.” And even after “consumers place an order, we’ll make some suggestions for last-minute additions to the order that the consumer might be interested in. Among these suggestions, the system can include Featured Product ads.”But it’s all the data and connections to their consuming customers that is the real “secret sauce” for Instacart’s ad-targeting and influence operations. The company knows what’s in and out of everyone’s shopping carts, explaining that “Instacart tracks (link is external) the source or ‘path to cart’ for all items purchased through Instacart marketplace, differentiating between three main groups—items bought from search results, browsing departments, aisles, and other discovery areas of Instacart, or from a list of previous purchases, which we call ‘buy it again.’” As it explains, the “Instacart Ads solution (link is external)” offers “a full suite of advertising products that animate the entire customer journey—from search through purchase.” These include opportunities for marketers to become part of “the ‘buy it again’ lists where consumers are shown a list of products that they have bought on previous orders. These can act as reminders of meals or recipes they’ve made before and items they tend to stock up on. Our brand partners can leverage Instacart Ads products to appear on ‘buy it again’ lists so they stay top of mind with their customers and aid in retaining valuable customers.”The company’s advertising blog discusses its use of what is increasingly the most valuable information a company can have—known as “first-party” data, where (allegedly) a consumer has given their consent to have all their information used. Instacart explains (link is external) this data “encompasses intent and purchase signals… from users signed up to an online grocery app,” and that it can be leveraged by its brand and advertising clients. The online ordering company explains that its “rich and diverse data sources” include “access to millions of orders over time from over 600 retail partners, across 45,000 stores, involving millions of households…. [A] tremendously valuable data set…this data is updated every night….” Instacart analyzes this trove of data, including point-of-sale, transaction log and out-of-stock information, to help it zero in on a key goal—to enable its advertisers to better understand and take advantage of what it terms “basket affinities.” In a webinar, Instacart defined (link is external) that concept:Basket affinities helps Instacart, and its brand partners, to create consumer ‘types’, discover product interactions, understand mission-dominant baskets, and identify trigger products — ultimately building a picture of how brands are bought online that we then share with our partners to build a better plan to acquire and retain valuable consumers. The term ‘basket affinity’ covers examining the one-to-one, group-to-group, or many-to-many relationships between products, as well as identifying consumer shopping missions and consumer profiles. [We note that Instacart says it “aggregates and anonymizes” this information. However, given its ability to target individuals, we will rely on regulators to determine how well such personal information is actually handled].Instacart also touts its ability to track the actual impact of advertising on its site, noting that it is a “closed loop” service “where ads are served to consumers in the same ‘space’ any resulting sales occur.” In a blog post (link is external) on how it empowers its advertiser partners, the company notes that Our advertising products provide options that can put their products in front of consumers on every ‘discovery surface’ on the platform to catch their eye when they are in this mode. Plus, our data shows that the majority of add to carts from these discovery surfaces are the first time the consumer has added that item to their cart — meaning it’s a great place for brands to acquire new customers.As with other major data (link is external)-driven digital marketers, Instacart has many grocery tech and ecommerce specialist partners, who provide brands and advertisers with a myriad of ways to promote, sell and otherwise “optimize” their products on its platform (such as Perpetua, (link is external) Tinuiti, (link is external) Skai (link is external) and Commerce IQ, (link is external) to only name several).The dramatic and recent growth of what’s called grocery tech is shaping the way consumers buy products and what prices they may pay. With companies such as Amazon, (link is external) Kroger, (link is external) Walmart, (link is external) Albertson’s (link is external) and Instacart now in essence Big Data-driven digital advertising companies, the public is being subjected to various practices that warrant regulatory scrutiny, oversight and public policy. We call on the Federal Trade Commission and state regulators to act. Among the key questions are how, if at all, are racial, ethnic and income data being used to target a consumer; are health data, including the buying of drugs and over-the-counter medications, being leveraged; and what measurement and performance information is being made available to partners and advertisers? We don’t want to have to “drop” our privacy and autonomy when we shop in the 21st Century.
    Jeff Chester
  • Blog

    Surveillance Marketing Industry Claims Future of an “Open Internet” Requires Massive Data Gathering

    New ways to take advantage of your “identity” raise privacy, consumer-protection and competition issues

    The Trade Desk is a leading (link is external) AdTech company, providing data-driven digital advertising services (link is external) to major brands and agencies. It is also playing an outsized role responding to the initiative led by Google (link is external) to create new, allegedly “privacy-friendly” approaches to ad targeting, which include ending the use of what are called “third-party” cookies. These cookies enable the identification and tracking of individuals, and have been an essential building block for surveillance advertising since the dawn (link is external) of the commercial Internet. As we explained in a previous post about the so-called race to “end” the use of cookies, the online marketing industry is engaged in a full-throated effort to redefine how our privacy is conceptualized and privately governed. Pressure from regulators (such as the EU’s GDPR) and growing concerns about privacy from consumers are among the reasons why this is happening now. But the real motivation, in my view, is that the most powerful online ad companies and global brands (such as Google, Amazon and the Trade Desk) don’t need these antiquated cookies anymore. They have so much of our information that they collect directly, and also available from countless partners (such as global brands). Additionally, they now have many new ways to determine who we are—our “identity”—including through the use of AI, machine learning and data clouds (link is external). “Unified ID 2.0” is what The Trade Desk calls its approach to harvesting our identity information for advertising. Like Google, they claim to be respectful of data protection principles. Some of the most powerful companies in the U.S. are supporting the Unified ID standard, including Walmart, Washington Post, P&G, Comcast, CBS, Home Depot, Oracle, and Nielsen. But more than our privacy is at stake as data marketing giants fight over how best to reap the financial rewards (link is external) of what is predicted eventually to become a trillion dollar global ad marketplace. This debate is increasingly focused on the very future of the Internet itself, including how it is structured and governed. Only by ensuring that advertisers can continue to successfully operate powerful data-gathering and ad-targeting systems, argues Trade Desk CEO Jeff Green, can the “Open (link is external) Internet” be preserved. His argument, of course, is a digital déjà vu version of what media moguls have said in the U.S. dating back to commercial radio in the 1930’s. Only with a full-blown, ad-supported (and regulation-free) electronic media system, whether it was broadcast radio, broadcast TV, or cable TV, could the U.S. be assured it would enjoy a democratic and robust communications environment. (I was in the room at the Department of Commerce back in the middle 1990’s when advertisers were actually worried that the Internet would be largely ad-free; the representative from P&G leaned over to tell me that they never would let that happen—and he was right.) Internet operations are highly influenced to serve the needs of advertisers, who have reworked its architecture to ensure we are all commercially surveilled. For decades, the online ad industry has continually expanded ways to monetize our behaviors, emotions, location and much more. (link is external) Last week, The Trade Desk unveiled its latest iteration using Unified ID 2.0—called Solimar (see video (link is external) here). Solimar uses “an artificial intelligence tool called Koa (link is external), which makes suggestions” to help ensure effective marketing campaigns. Reflecting the serial partnerships that operate to provide marketers with a gold mine of information on any individual, The Trade Desk has a “Koa Identity (link is external) Alliance,” a “cross-device graph that incorporates leading and emerging ID solutions such as LiveRamp Identity Link, Oracle Cross Device, Tapad (link is external) Device Graph, and Adbrain Device Graf.” This system, they say, creates an effective way for marketers to develop a data portrait of individual consumers. It’s useful to hear what companies such as The Trade Desk say as we evaluate claims that “big data” consumer surveillance operations are essential for a democratically structured Internet. In its most recent Annual Report (link is external), the company explains that “Through our self-service, cloud-based platform, ad buyers can create, manage, and optimize more expressive data-driven digital advertising campaigns across ad formats and channels, including display, video, audio, in-app, native and social, on a multitude of devices, such as computers, mobile devices, and connected TV (‘CTV’)…. We use the massive data captured by our platform to build predictive models around user characteristics, such as demographic, purchase intent or interest data. Data from our platform is continually fed back into these models, which enables them to improve over time as the use of our platform increases.” And here’s how The Trade Desk’s Koa’s process is described in the trade publication Campaign (link is external) Asia: …clients can specify their target customer in the form of first-party or third-party data, which will serve as a seed audience that Koa will model from to provide recommendations. A data section provides multiple options for brands to upload first-party data including pixels, app data, and IP addresses directly into the platform, or import data from a third-party DMP or CDP. If a client chooses to onboard CRM data in the form of email addresses, these will automatically be converted into UID2s. Once converted, the platform will scan the UID2s to evaluate how many are ‘active UID2s’, which refers to how many of these users have been active across the programmatic universe in the past week. If the client chooses to act on those UID2s, they will be passed into the programmatic ecosystem to match with the publisher side, building the UID2 ecosystem in tandem. For advertisers that don't have first-party data… an audiences tab allows advertisers to tap into a marketplace of second- and third-party data so they can still use interest segments, purchase intent segments and demographics. In other words, these systems have a ton of information about you. They can easily get even more data and engage in the kinds of surveillance advertising that regulators (link is external) and consumer (link is external) advocates around the world are demanding be stopped. There are now dozens of competing “identity solutions”—including those from Google, Amazon (link is external), data brokers (link is external), telephone (link is external) companies, etc. (See visual at bottom of page here (link is external)). The stakes here are significant—how will the Internet evolve in terms of privacy, and will its core “DNA” be ever-growing forms of surveillance and manipulation? How do we decide the most privacy-protective ways to ensure meaningful monetization of online content—and must funding for such programming only be advertising-based? In what ways are some of these identity proposals a way for powerful platforms such as Google to further expand its monopolistic control of the ad market? These and other questions require a thoughtful regulator in the U.S. to help sort this out and make recommendations to ensure that the public truly benefits. That’s why it’s time for the U.S. Federal Trade Commission to step in. The FTC should analyze these advertising-focused identity efforts; assess their risks and the benefits; address how to govern the collection and use of data where a person has supposedly given permission to a brand or store to use it (known as “first-party” data). A key question, given today’s technologies, is whether meaningful personal consent for data collection is even possible in a world driven by sophisticated and real-time AI systems that personalize content and ads? The commission should also investigate the role of data-mining clouds and other so-called “clean” rooms where privacy is said to prevail despite their compilation of personal information for targeted advertising. The time for private, special interests (and conflicted) actors to determine the future of the Internet, and how our privacy is to be treated, is over.
    Jeff Chester
  • Press Release

    Against surveillance-based advertising

    CDD joins an international coalition of more than 50 NGOs and scholars in a call for a surveillance-based advertising ban in its Digital Services Act and for the U.S. to enact a federal digital privacy and civil rights law

    International coalition calls for action against surveillance-based advertising Every day, consumers are exposed to extensive commercial surveillance online. This leads to manipulation, fraud, discrimination and privacy violations. Information about what we like, our purchases, mental and physical health, sexual orientation, location and political views are collected, combined and used under the guise of targeting advertising.   In a new report, the Norwegian Consumer Council (NCC) sheds light on the negative consequences that this commercial surveillance has on consumers and society. Together with [XXX] organizations and experts, NCC is asking authorities on both sides of the Atlantic to consider a ban. In Europe, the upcoming Digital Services Act can lay the legal framework to do so. In the US, legislators should seize the opportunity to enact comprehensive privacy legislation that protects consumers.  - The collection and combination of information about us not only violates our right to privacy, but renders us vulnerable to manipulation, discrimination and fraud. This harms individuals and society as a whole, says the director of digital policy in the NCC, Finn Myrstad.  In a Norwegian population survey conducted by YouGov on behalf of the NCC, consumers clearly state that they do not want commercial surveillance. Just one out of ten respondents were positive to commercial actors collecting personal information about them online, while only one out of five thought that ads based on personal information is acceptable. - Most of us do not want to be spied on online, or receive ads based on tracking and profiling. These results mirror similar surveys from Europe and the United States, and should be a powerful signal to policymakers looking at how to better regulate the internet, Myrstad says. Policymakers and civil society organisations on both sides of the Atlantic are increasingly standing up against these invasive practices. For example, The European Parliament and the European Data Protection Supervisor (EDPS) have already called for phasing out and banning surveillance-based advertising. A coalition of consumer and civil rights organizations in the United States has called for a similar ban.     Significant consequences  The NCC report ’Time to ban surveillance-based advertising’ exposes a variety of harmful consequences that surveillance-based advertising can have on individuals and on society:    1. Manipulation  Companies with comprehensive and intimate knowledge about us can shape their messages in attempts to reach us when we are susceptible, for example to influence elections or to advertise weight loss products, unhealthy food or gambling.     2. Discrimination  The opacity and automation of surveillance-based advertising systems increase the risk of discrimination, for example by excluding consumers based on income, gender, race, ethnicity or sexual orientation, location, or by making certain consumers pay more for products or services.     3. Misinformation   The lack of control over where ads are shown can promote and finance false or malicious content. This also poses significant challenges to publishers and advertisers regarding revenue, reputational damage, and opaque supply chains. 4. Undermining competition   The surveillance business model favours companies that collect and process information across different services and platforms. This makes it difficult for smaller actors to compete, and negatively impacts companies that respect consumers’ fundamental rights.  5. Security risks  When thousands of companies collect and process enormous amounts of personal data, the risk of identity theft, fraud and blackmail increases. NATO has described this data collection as a national security risk.    6. Privacy violations   The collection and use of personal data is happening with little or no control, both by large companies and by companies that are unknown to most consumers. Consumers have no way to know what data is collected, who the information is shared with, and how it may be used.   -  It is very difficult to justfy the negative consequences of this system. A ban will contribute to a healthier marketplace that helps protect individuals and society, Myrstad comments.  Good alternatives  In the report, the NCC points to alternative digital advertising models that do not depend on the surveillance of consumers, and that provide advertisers and publishers more oversight and control over where ads are displayed and which ads are being shown. - It is possible to sell advertising space without basing it on intimate details about consumers. Solutions already exist to show ads in relevant contexts, or where consumers self-report what ads they want to see, Myrstad says. - A ban on surveillance-based advertising would also pave the way for a more transparent advertising marketplace, diminishing the need to share large parts of ad revenue with third parties such as data brokers. A level playing field would contribute to giving advertisers and content providers more control, and keep a larger share of the revenue. The coordinated push behind the report and letter illustrates the growing determination of consumer, digital rights, human rights and other civil society groups to end the widespread business model of spying on the public.
  • The Center for Digital Democracy and 23 other leading civil society groups sent a letter to President Biden today asking his Administration to ensure that any new transatlantic data transfer deal is coupled with the enactment of U.S. laws that reform government surveillance practices and provide comprehensive privacy protections.
  • Contact: Jeff Chester, CDD (jeff@democraticmedia.org (link sends e-mail); 202-494-7100) David Monahan, CCFC (david@commercialfreechildhood.org (link sends e-mail);) Advocates Ask FTC to Protect Youth From Manipulative “Dark Patterns” Online BOSTON, MA and WASHINGTON, DC — May 28, 2021—Two leading advocacy groups protecting children from predatory practices online filed comments today asking the FTC to create strong safeguards to ensure that internet “dark patterns” don’t undermine children’s well-being and privacy. Campaign for a Commercial-Free Childhood (CCFC) and the Center for Digital Democracy (CDD) cited leading authorities on the impacts of internet use on child development in their comments prepared by the Communications & Technology Law Clinic at Georgetown University Law Center. These comments follow testimony given by representatives of both groups last month at a FTC workshop spearheaded by FTC Acting Chair Rebecca Slaughter. CCFC and CDD say tech companies are preying upon vulnerable kids, capitalizing on their fear of missing out, desire to be popular, and inability to understand the value of misleading e-currencies, as well as putting them on an endless treadmill on their digital devices. They urged the FTC to take swift and strong action to protect children from the harms of dark patterns. Key takeaways include: - A range of practices, often called “dark patterns” are pervasive in the digital marketplace, manipulate children, are deceptive and unfair and violate Section 5 of the FTC Act. They take advantage of a young person’s psycho-social development, such as the need to engage with peers. - The groups explained the ways children are vulnerable to manipulation and other harms from “dark patterns,” including that they have “immature and developing executive functioning,” which leads to impulse behaviors. - The FTC should prohibit the use of dark pattern practices in the children’s marketplace; issue guidance to companies to ensure they do not develop or deploy such applications, and include new protections under their Children’s Online Privacy Protection Act (COPPA) rulemaking authority to better regulate them. The commission must bring enforcement actions against the developers using child-directed dark patterns. - The FTC should prohibit the use of micro-transactions in apps serving children, including the buying of virtual currency to participate in game playing. - The FTC should adopt a definition of dark patterns to include all “nudges” designed to use a range of behavioral techniques to foster desired responses from users. The groups’ filing was in response to the FTC’s call for comments (link is external) on the use of digital “dark patterns” — deceptive and unfair user interface designs — on websites and mobile apps. Comment of Jeff Chester, executive Director of the Center for Digital Democracy: “Dark Patterns” are being used in the design of child-directed services to manipulate them to spend more time and money on games and other applications, as well as give up more of their data. It’s time the FTC acted to protect young people from being unfairly treated by online companies. The commission should issue rules that prohibit the use of these stealth tactics that target kids and bring legal action against the companies promoting their use. Comment of Josh Golin, executive Director of the Campaign for a Commercial-Free Childhood: In their rush to monetize children, app and game developers are using dark patterns that take advantage of children’s developmental vulnerabilities. The FTC has all the tools it needs to stop unethical, harmful, and illegal conduct. Doing so would be a huge step forward towards creating a healthy media environment for children. Comment of Michael Rosenbloom, Staff Attorney & Clinical Teaching Fellow, Communications and Technology Law Clinic, Georgetown University Law Center: Software and game companies are using dark patterns to pressure children into playing more and paying more. Today, many apps and games that children play use dark patterns like arbitrary virtual currencies, encouragement from in-game characters, and ticking countdown timers, to get children to spend more time and money on microtransactions. These dark patterns harm children and violate Section 5 of the FTC Act, and we urge the FTC to act to stop these practices. ###
  • Press Release

    “Big Food” and “Big Data” Online Platforms Fueling Youth Obesity Crisis as Coronavirus Pandemic Rages

    New Report Calls for Action to Address Saturation of Social Media, Gaming Platforms, and Streaming Video with Unhealthy Food and Beverage Products

    “Big Food” and “Big Data” Online Platforms Fueling Youth Obesity Crisis as Coronavirus Pandemic RagesNew Report Calls for Action to Address Saturation of Social Media, Gaming Platforms, and Streaming Video with Unhealthy Food and Beverage Products Contact: Jeff Chester (202-494-7100) For Immediate ReleaseWashington, DC, May 12, 2021A report released today calls for federal and global action to check the growth of digital marketing of food and beverage products that target children and teens online. Tech platforms especially popular with young people—including Facebook’s Instagram, Amazon’s Twitch, ByteDance’s TikTok, and Google’s YouTube – are working with giant food and beverage companies, such as Coca Cola, KFC, Pepsi and McDonald’s, to promote sugar-sweetened soda, energy drinks, candy, fast food, and other unhealthy products across social media, gaming, and streaming video. The report offers fresh new analysis and insight into the most recent industry practices, documenting how “Big Food” and “Big Tech” are using AI, machine learning, and other data-driven techniques to ensure that food marketing permeates all of the online cultural spaces where children and teenagers congregate. The pandemic has dramatically increased exposure to these aggressive new forms of marketing, further increasing young people’s risks of becoming obese. Black and Brown youth are particularly vulnerable to new online promotional strategies. Noting that concerns about youth obesity have recently fallen off the public radar in the U.S., the report calls for both international and domestic policies to rein in the power of the global technology and food industries. The report and an executive summary are available at the Center for Digital Democracy’s (CDD) website, along with other background material.“Our investigation found that there is a huge amount of marketing for unhealthy foods and beverages all throughout the youth digital media landscape, and it has been allowed to flourish with no government oversight,” explained Kathryn C. Montgomery, PhD, the report’s lead author, Professor Emerita at American University and CDD’s Senior Strategist. “We know from decades of research that marketing of these products contributes to childhood obesity and related illnesses. And we’ve witnessed how so many children, teens, and young adults suffering from these conditions have been particularly vulnerable to the coronavirus. Both the technology industry and the food and beverage industry need to be held accountable for creating an online environment that undermines young people’s health.”The report examines an array of Big Data strategies and AdTech tools used by the food industry, focusing on three major sectors of digital culture that attract large numbers of young people -- the so-called “influencer economy,” gaming and esports platforms, and the rapidly expanding streaming and online video industry.Dozens of digital campaigns by major food and beverage companies, many of which have won prestigious ad industry awards, illustrate some of the latest trends and techniques in digital marketing:The use of influencers is one of the primary ways that marketers reach and engage children and teens. Campaigns are designed to weave branded material “seamlessly into the daily narratives” shared on social media. Children and teens are particularly susceptible to influencer marketing, which taps into their psycho-social development. Marketing researchers closely study how young people become emotionally attached to celebrities and other influencers through “parasocial” relationships.McDonald’s enlisted rapper Travis Scott, to promote the “Travis Scott Meal” to young people, featuring “a medium Sprite, a quarter pounder with bacon, and fries with barbecue sauce.” The campaign was so successful that some restaurants in the chain sold out of supplies within days of its launch. This and other celebrity endorsements have helped boost McDonald’s stock price, generated a trove of valuable consumer data, and triggered enormous publicity across social media.Food and beverage brands have flocked to Facebook-owned Instagram, which is considered one of the best ways to reach and engage teens.According to industry research, nearly all influencer campaigns (93%) are conducted on Instagram. Cheetos’ Chester Cheetah is now an “Instagram creator,” telling his own “stories” along with millions of other users on the platform.One Facebook report, “Quenching Today’s Thirsts: How Consumers Find and Choose Drinks,” found that “64% of people who drink carbonated beverages use Instagram for drinks-related activities, such as sharing or liking posts and commenting on drinks content,” and more than a third of them report following or “liking” soft drink “brands, hashtags, or influencer posts.”The online gaming space generates more revenue than TV, film or music, and attracts viewers and players – including many young people -- who are “highly engaged for a considerable length of time.” Multiplayer online battle arena (MOBA) and first-person shooter games are considered one of the best marketing environments, offering a wide range of techniques for “monetization,” including in-game advertising, sponsorship, product placement, use of influencers, and even “branded games” created by advertisers. Twitch, the leading gaming platform, owned by Amazon, has become an especially important venue for food and beverage marketers. Online gamers and fans are considered prime targets for snack, soft drink, and fast food brands, all products that lend themselves to uninterrupted game play and spectatorship.PepsiCo’s energy drink, MTN DEW Amp Game Fuel, is specifically “designed with gamers in mind.” To attract influencers, it was featured on Twitch’s “Bounty Board,” a one-stop-shopping tool for “streamers,” enabling them to accept paid sponsorship (or “bounties”) from brands that want to reach the millions of gamers and their followers.Red Bull recently partnered with Ninja“the most popular gaming influencer in the world with over 13 million followers on Twitch, over 21 million YouTube subscribers, and another 13 million followers on Instagram.”Dr. Pepper featured the faces of players of the popular Fortnite game on its bottles, with an announcement on Twitter that this campaign resulted in “the most engaged tweet” the soft-drink company had ever experienced.Wendy’s partnered with “five of the biggest Twitch streamers,” as well as food delivery app Uber Eats, to launch its “Never Stop Gaming” menu, with the promise of “five days of non-stop gaming, delicious meal combos and exclusive prizes.” Branded meals were created for each of the five streamers, who offered their fans the opportunity to order directly through their Twitch channels and have the food delivered to their doors.One of the newest marketing frontiers is streaming and online video, which have experienced a boost in viewership during the pandemic. Young people are avid users, accessing video on their mobile devices, gaming consoles, personal computers, and online connections to their TV sets.Concerned that teens “are drinking less soda,” Coca-Cola’s Fanta brand developed a comprehensive media campaign to trigger “an ongoing conversation with teen consumers through digital platforms” by creating four videos based on the brand’s most popular flavors, and targeting youth on YouTube, Hulu, Roku, Crackle, and other online video platforms. “From a convenience store dripping with orange flavor and its own DJ cat, to an 8-bit videogame-ified pizza parlor, the digital films transport fans to parallel universes of their favorite hangout spots, made more extraordinary and fantastic once a Fanta is opened.”New video ad formats allow virtual brand images to be inserted into the content and tailored to specific viewers. “Where one customer sees a Coca-Cola on the table,” explained a marketing executive, “the other sees green tea. Where one customer sees a bag of chips, another sees a muesli bar… in the exact same scene.”The major technology platforms are facilitating and profiting from the marketing of unhealthy food and beverage products.Facebook’s internal “creative shop” has helped Coca-Cola, PepsiCo, Unilever, Nestle and hundreds of other brands develop global marketing initiatives to promote their products across its platform. The division specializes in “building data-driven advertising campaigns, branded content, branded entertainment, content creation, brand management, social design,” and similar efforts.Google regularly provides a showcase for companies such as Pepsi, McDonald’s and Mondelez to tout their joint success promoting their respective products throughout the world.For example, Pepsi explained in a “Think with Google” post that it used Google’s “Director’s Mix” personalization video advertising technology to further what it calls its ability to “understand the consumer’s DNA,” meaning their “needs, context, and location in the shopping journey.” Pepsi could leverage Google’s marketing tools to help its goal of combining “insights with storytelling and drive personalized experiences at scale.”Hershey’s has been working closely with Amazon to market its candy products via streaming video, as well as through its own ecommerce marketplace. In a case study published online, Amazon explained that “…as viewing consumption began to fragment, the brand [Hershey’s] realized it was no longer able to reach its audience with linear TV alone.” Amazon gave Hershey’s access to its storehouse of data so the candy company could market its products on Amazon’s streaming services, such as IMDbTV. Amazon allowed Hershey’s to use Amazon’s data to ensure the candy brands would “be positioned to essentially ‘win’ search in that category on Amazon and end up as the first result….” Hershey’s also made use of “impulse buy” strategies on the Amazon platform, including “cart intercepts,” which prompt a customer to “add in snacks as the last step in their online shopping trip, mimicking the way someone might browse for candy during the checkout at a physical store.”Some of the largest food and beverage corporations—including Coca-Cola, McDonald’s, and Pepsi—have, in effect, transformed themselves into Big Data businesses.Coca-Cola operates over 40 interconnected social media monitoring facilities worldwide, which use AI to follow customers, analyze their online conversations, and track their behaviors.PepsiCo has developed a “fully addressable consumer database” (called “Consumer DNA”) that enables it to “see a full 360 degree view of our consumers.”McDonald’s made a significant investment in Plexure, a “mobile engagement” company specializing in giving fast food restaurants the ability “to build rich consumer profiles” and leverage the data “to provide deeply personalized offers and content that increase average transaction value” and help generate other revenues. One of its specialties is designing personalized messaging that triggers the release of the brain chemical, dopamine.The report raises particularly strong concerns about the impact of all these practices on youth of color, noting that food and beverage marketers “are appropriating some of the most powerful ‘multicultural’ icons of youth pop culture and enlisting these celebrities in marketing campaigns for sodas, ‘branded’ fast-food meals, and caffeine-infused energy drinks.” These promotions can “compound health risks for young Blacks and Hispanics,” subjecting them to “multiple layers of vulnerability, reinforcing existing patterns of health disparity that many of them experience.”“U.S. companies are infecting the world’s young people with invasive, stealth, and incessant digital marketing for junk food,” commented Lori Dorfman, DrPH, director, Berkeley Media Studies Group, one of CDD’s partners on the project. “And they are targeting Black and Brown youth because they know kids of color are cultural trendsetters,” she explained. “Big Food and Big Tech run away with the profits after trampling the health of children, youth, and families.”The Center for Digital Democracy and its allies are calling for a comprehensive and ambitious set of policies for limiting the marketing of unhealthy food and beverages to young people, arguing that U.S. policymakers must work with international health and youth advocacy organizations to develop a coordinated agenda for regulating these two powerful global industries. As the report explains, other governments in the UK, Europe, Canada, and Latin America have already developed policies for limiting or banning the promotion of foods that are high in fat, sugar, and salt, including on digital platforms. Yet, the United States has continued to rely on an outdated self-regulatory model that does not take into account the full spectrum of Big Data and AdTech practices in today’s contemporary digital marketplace, places too much responsibility on parents, and offers only minimal protections for the youngest children.“Industry practices have become so sophisticated, widespread, and entangled that only a comprehensive public policy approach will be able to produce a healthier digital environment for young people,” explained Katharina Kopp, PhD, CDD’s Deputy Director and Director of Research.The report lays out an eight-point research-based policy framework:Protections for adolescents as well as young children.Uniform, global, science-based nutritional criteria.Restrictions on brand promotion.Limits on the collection and use of data.Prohibition of manipulative and unfair marketing techniques and design features.Market research protections for children and teens.Elimination of digital racial discrimination.Transparency, accountability, and enforcement.###