Sen. Mike Lee (R-Utah) has introduced a bill that would likely require Google and Facebook to divest their ad-sales side businesses and, concerned interactive online advertisers say, likely kill their industry.

Lee is billing the Advertising Middlement Endangering Rigorous Internet Competition Accountability (AMERICA) Act as protecting competition in digital advertising by disallowing powerful online platforms like search giant Google or social-media titan Facebook from having a piece of the digital ad business driven by their platforms.

But the Interactive Advertising Bureau said the bill “has the potential to destroy one of the most powerful growth engines of the economy — digital advertising and media.“ It also said the bill would hurt millions of small businesses that rely on those digital ads by creating a “more inefficient, costly and fragmented advertising ecosystem.”

“The AMERICA Act prohibits large digital advertising companies from owning more than one part of the digital ad ecosystem if they process more than $20 billion in digital ad transactions,” reads a summary on Lee's website.

That means that ad exchange owners can't own supply- or demand-side platforms, and the largest supply- and demand-side platforms can't be co-owned.

But it is not only the largest platforms that would be affected by the bill.

Companies doing more than $5 billion in digital transactions could have a piece of both sides of the market, but they would have to abide by rules including that they must take “the best” bid on ads; provide transparency to clients to demonstrate they are acting in the customer’s best interests; and, if operating on both sides of the market, they would have to erect conflict-of-interest “firewalls.”

The new regulations and rules would be enforced both by the Justice Department and states attorneys general. And there is the dreaded — at least by most industry players — private right of action, which means companies could be sued by individuals for violations.

Lee's summary of the bill makes it clear he thinks Google and Facebook will have to divest ”significant“ portions of their ad businesses, and that Amazon may have to as well. It would also put a crimp in Apple’s efforts on the third-party ad front.

The Department of Justice says its June settlement with Meta (formerly Facebook) over discriminatory targeting of online housing ads has met a "key" milestone with Meta's completion of a new system to "address algorithmic discrimination."

The agreement marks "the first time that Meta is subject to court oversight for its advertisement targeting and delivery system," DOJ said, and ensures that it will be subject to that court oversight through June 2026.

DOJ said the settlement had held Meta accountable for "unlawful algorithmic bias and discriminatory ad delivery on its platforms."

Also: Meta May Not Be Betta, But It Still Matters to Streaming Video’s Future

The Biden Administration had alleged that Meta algorithms targeting housing ads relied on protected characteristics including a recipient's age, sex and race to gauge relevance.

Meta's new system, dubbed the Variance Reduction System (VRS) reduces the difference between an eligible audience's racial/ethnic/gender makeup and an actual audience. That system will get a third-party review to verify whether VRS is actually meeting specific compliance metrics. ■

The Federal Trade Commission is clearly serious about regulating online privacy and targeted advertising, and it has the Democratic majority to deliver.

It has posted a notice on its website with the following provocative headline: “Coming Soon: Protecting Kids from Stealth Advertising in Digital Media.”

What is coming is an October 19 virtual event featuring “researchers, child development and legal experts, consumer advocates and industry professionals” to help it figure out, not whether online marketing to children needs reining in, but “what measures should be implemented to protect children from manipulative advertising.”

The FTC also said it wants additional input on how kids are affected by digital advertising and marketing “that may blur the line between ads and entertainment.”

The Federal Communications Commission is giving commenters until Nov. 18 so they can comment on any issues brought up at the Oct. 19 webcast.

Also: FTC Report Targets 'Dark Patterns' That Deceive Online Users

The FTC has already launched a rulemaking targeting what it calls “commercial surveillance and data security practices that harm consumers and competition” by which it means, among other things, data collection for online targeted advertising. It held a feedback forum last month on those related issues as well.

Unlike the FCC, which is at a political 2-2 tie, the FTC has a Democratic majority and a chair in Lina Khan who has been a big critic of edge provider market power and practices.

The FTC got praise for its focus on potential privacy regulations from Sen. Ed Markey (D-Mass.), the author of the Children’s Online Privacy Protection Act (COPPA). Markey sent Khan a letter last week “applauding the FTC’s continued efforts to implement strong privacy safeguards” and its focus on gathering feedback on “how to effectively address surveillance threats to children and teens online.”

Markey also wants the FTC to update its implementation of COPPA by expanding the definition of personal information and coming up with rules that prevent a platform conditioning a child's use on sharing more data than is “reasonably necessary.”

“Experts agree that we have reached a crisis point for children and teens online, as the rates of mental health challenges for them soar, and the U.S. Surgeon General has called on technology and social media companies to address these threats to young people,” Markey wrote, joined by Reps. Kathy Castor (D-Fla.) and Lori Trahan (D-Mass.). “In countries around the world, government entities have begun to take action by enacting policies that combat pernicious online threats to kids. The United States must now do the same.” ▪️

The Interactive Advertising Bureau (IAB) has taken aim at the Banning Surveillance Advertising Act, which would ban the use of personal information to target most online advertising, saying the bill would kill the commercial internet as we know it.

The bill was introduced this week by Reps. Anna Eshoo (D-Calif.), Jan Schakowsky (D-Ill.) and Sen. Cory Booker (D-N.J.). IAB said they must not understand the degree to which the bill would "effectively eliminate internet advertising in the United States, jeopardizing an estimated 17 million jobs primarily at small- and medium-sized businesses."

“If the sponsors understood the devastating effects this bill would have, not only on the advertising industry, but also on our entire economy, they wouldn’t have introduced it,” said IAB CEO David Cohen in a statement.

Also: FTC Ponders Rules on Data Privacy

The bill prohibits advertisers or third parties from using personal data for most targeted advertising, the exceptions being ones that use broad location targeting to, say, a specific city.

The bill would prevent any targeting of ads based on race, gender, religion or any personal data purchased from data brokers. It would not prohibit so-called "contextual advertising," which are ads relevant to content a user is engaging with.

It also defines that personal information broadly, saying it comprises "data linked or reasonably linkable to an individual or connected device, including inferred and derived data, contents of communications, internet browsing history, and advertising identifiers."

Also: Digital Advertising Still Growing, But Faces Concerns, IAB Report Says

“Banning personalized ads would severely impact an increasingly important economic sector, stifling innovation and dramatically harming the small business community who use data-driven advertising to promote their goods and services and reach customers all over the world,” said Cohen. “This bill would make advertising less precise, more expensive, and raise costs for everyone.

“This terrible bill would disenfranchise businesses that advertise on the internet, and hundreds of millions of Americans who use it every day to find exactly what they need, quickly. It could eliminate the commercial internet almost entirely." ■

A trio of Democratic legislators has introduced a bill that would ban the use of personal information to target most online advertising.

The bill defines that personal information broadly, saying it comprises "data linked or reasonably linkable to an individual or connected device, including inferred and derived data, contents of communications, internet browsing history, and advertising identifiers."

The Banning Surveillance Advertising Act was introduced Tuesday (January 18) by Reps. Anna Eshoo (D-Calif.), Jan Schakowsky (D-Ill.) and Sen. Cory Booker (D-N.J.).

Also: FTC Ponders Rules on Data Privacy

The bill prohibits advertisers or third parties from using personal data for most targeted advertising, the exceptions being ones that use broad location targeting to, say, a specific city.

The bill would prevent any targeting of ads based on race, gender, religion or any personal data purchased from data brokers.

It would not prohibit so-called "contextual advertising," which are ads relevant to content a user is engaging with.

Eshoo said the bill was aimed at the "unseemly collection and hoarding of personal data" for targeting ads, calling it a pernicious practice that fuels disinformation, voter suppression, discrimination and more.

"With the introduction of the Ban Surveillance Advertising Act, advertisers will be forced to stop exploiting individuals’ online behavior for profits and our communities will be safer as a result," said Booker. 

"ANA strongly disagrees with the new bills introduced by Congresswoman Eshoo and Senator Booker that would unreasonably restrain American businesses from using responsible, data-driven advertising to connect with consumers," said the Association of National Advertisers' government affairs office in a statement. "Study after study – as well as consumers’ own statements and responses to ads – show that data-driven advertising yields significant benefits for consumers, businesses and the US economy in general.  Access to information provided by such advertising helps consumers to make informed choices among products and services; consumers understand, desire and value relevant ads.  Data-driven advertising enables businesses to engage more efficiently with their customers and contributes significantly to the overall US GDP.  Furthermore, data-driven advertising supports free and low-cost online content and services and allows the Internet to remain open and accessible to all.  The bills would eliminate these benefits.  We also have great concerns about the constitutionality of the bills, as they appear to encroach on First Amendment free speech protections, and the private right of action lawsuit provision in the bills could lead to excessive and costly litigation.

"The sponsors base their bills on the fact that consumers don’t have a choice about these ads; but they do.  Consumers have various means by which they can control interest-based advertising, including opting out of the practice if they wish. ANA will continue its efforts to promote advertising that is helpful to consumers and businesses alike.  Rather than pursuing this flawed legislation, we urge Members of Congress to focus on passing a national privacy law to eliminate the inconsistent and burdensome requirements being adopted by states that leave consumers with varying degrees of protection depending upon where they live, and that pose great financial costs on businesses." 

■

The Federal Trade Commission has released a report on the use of social media bots--algorithmically driven computer software--in online advertising and finds them to be thriving, out in the open, and easy, cheap and effective to sell, buy and use. 

The report came at the direction of the Senate Appropriations Committee, which wanted input on deceptive advertising. While that majority report passes no judgment, Democratic commissioner Rohit Chopra, in his a separate statement, does, concluding there are major issues that Big Tech won't solve, but the FTC needs to tackle. 

Related: Twitter's Dorsey Says They Will Try to Label Bot-Driven Communications

The report, which without footnotes is less than four pages, is essentially a brief survey of the landscape rather than a critique of how bots are painting it. It points out the good and bad uses they can be put to, how they range from simple to sophisticated, and that they can be tough to detect despite efforts to combat them. The commission also points to past enforcement in the area, including bots that mimic real people. 

Some of the bad ad-related uses include artificially boosting traffic to ads, delivering spam or spreading fake online product reviews. The FTC used more than a page of the report to detail an October 2019 enforcement action against a company, Devumi, that sold "fake followers, subscribers, views, and likes." 

The takeaway from the report is that social media bots are, well, "simply bots that run on social media platforms, where they are common and have a wide variety of uses, just as with bots operating elsewhere," and that if a bot is being used unfairly or deceptively, the FTC can act, and has acted, using its unfair or deceptive practices authority. It did concede Devumi was the first such action in the social media bot space. 

It also points out that "Major social media companies have made commitments – codified in the EU Code of Practice on Disinformation – to better protect their platforms and networks from manipulation, including the misuse of automated bots." 

While voting to approve the report--the vote was 4-0-1, the 1 being Democrat Rebecca Kelly Slaughter, who did not participate--Democrat Rohit Chopra issued his own report of sorts that did critique social media bots and made that clear from the first sentence: "The viral dissemination of disinformation on social media platforms poses serious harms to society." 

While the report essentially made no value judgments beyond the enforcement action against a bad actor, Chopra said Big Tech platforms can't be trusted to police themselves. "While the Commission’s report cites platforms’ efforts to remove bots and fake accounts, it is crucial to recognize that the platforms’ core incentives do not align with this goal," he wrote. 

He also talked about bots inflating the price of advertising, citing Association of National Advertisers data showing 35% of impressions online are fraudulent, fraud that could have cost advertisers almost $6 billion in 2019 alone. 

While the report confines itself to detailing that single enforcement action, Chopra says he thinks the commission can and should be challenging other practices, including fraudulent ad metrics. "Major advertisers routinely raise these concerns, and the Media Rating Council is reportedly reviewing Facebook’s certification, including its practices with respect to fake accounts," he said. "The FTC’s authority is limited to 'commerce' and generally does not encompass political speech," he also concedes. "However, individuals, firms, and corporations operating for profit are covered by the FTC Act’s prohibition on deception. In other words, if a for-profit enterprise offers surreptitious manipulation services to denigrate a commercial competitor or political opponent, it may be subject to the FTC’s jurisdiction." 

Related: House Takes Deep Dive into Online Fakes

The majority report lacks a conclusion, ending with the statement: "The Commission’s staff will continue its monitoring of enforcement opportunities in matters involving advertising on social media as well as the commercial activity of bots on those platforms. 

Chopra's conclusion: "Congress is right to be alarmed by the explosion of disinformation online driven by bots and fake accounts....The FTC’s authority to prohibit deceptive acts and practices is one way tackle the harms posed to our economy, democracy, and national security. But, of course, policymakers around the world must do more." 

Rep. Anna Eshoo (D-Calif.) has collected a number of supporters for her bill banning microtargeted political ads.

Those backers include Mozilla, Common Cause, the Center for Digital Democracy, and the Open Markets Institute. 

The idea behind the bill is to battle coordinated disinformation/misinformation campaigns. 

H.R. 7014, the Banning Microtargeted Political Ads Act, would prohibit social media sites, streaming services and ad networks from targeting political ads based on demos or behavioral data.  

It applies to all electioneering communications, meaning both candidate and noncandidate ads. 

The Federal Election Commission will enforce the prohibition and there will be a private right of action as well, class action suits for example. 

The bill does allow ads targeted by state, municipality and congressional district and targeted to individuals who opt in to targeted ads.   

“Political speech is critical to democratic discourse, but organized disinformation and organic misinformation use microtargeting and prevent ideas from being debated in the open. Changing how paid political messaging works online could be a powerful step forward in response to the ongoing challenges of disinformation and manipulation of our democratic processes, whether by candidates, PACs, or others. We appreciate this legislation and the thoughtfulness of Rep. Eshoo in moving this discussion forward,” said Heather West, head of Americas public policy at Mozilla. 

According to a recent poll cited by Eshoo's office, a majority of both Republicans (75%) and Democrats (69%) oppose using personal information for hyper-targeted political ads.  

Rep. Anna Eshoo (D-Calif.) has collected a number of supporters for her bill banning microtargeted political ads.

Those backers include Mozilla, Common Cause, the Center for Digital Democracy, and the Open Markets Institute. 

The idea behind the bill is to battle coordinated disinformation/misinformation campaigns. 

H.R. 7014, the Banning Microtargeted Political Ads Act, would prohibit social media sites, streaming services and ad networks from targeting political ads based on demos or behavioral data.  

It applies to all electioneering communications, meaning both candidate and noncandidate ads. 

The Federal Election Commission will enforce the prohibition and there will be a private right of action as well, class action suits for example. 

The bill does allow ads targeted by state, municipality and congressional district and targeted to individuals who opt in to targeted ads.   

“Political speech is critical to democratic discourse, but organized disinformation and organic misinformation use microtargeting and prevent ideas from being debated in the open. Changing how paid political messaging works online could be a powerful step forward in response to the ongoing challenges of disinformation and manipulation of our democratic processes, whether by candidates, PACs, or others. We appreciate this legislation and the thoughtfulness of Rep. Eshoo in moving this discussion forward,” said Heather West, head of Americas public policy at Mozilla. 

According to a recent poll cited by Eshoo's office, a majority of both Republicans (75%) and Democrats (69%) oppose using personal information for hyper-targeted political ads.  

The Trump Administration won't challenge a proposal to create an online market where advertisers can get bids for advertising production services.

The Association of Independent Commercial Producers submitted a proposal to create an online platform where those advertisers can solicit bids from production services companies. In a response, DOJ told the counsel for AICP that while exchanging price and other competitive info can make it easier for competitors to coordinate activity anticompetitively, AICP has designed the platform to prevent that kind of info sharing.

Those include safeguards against information being shared among advertisers and firewalls against AICP accessing the third-party info.

Based on those safeguards and firewalls protecting third-party information, Antitrust Division Chief Makan Delrahim told AICP Justice has no intention of challenging the bidding platform.

A new federal court ruling leaves some doubt as to who can enforce consumer protections on search engines and other edge providers, and perhaps other parts of the economy as well.

A panel of the U.S. court of Appeals for the Ninth Circuit ruled this week that the Federal Trade Commission was precluded from using its consumer protection authority to sue AT&T for not telling customers of its grandfathered mobile broadband "unlimited" data plans that their data use was being throttled back their data once it reached a certain threshold.

The FCC is pursuing a similar complaint against AT&T, which is not affected by the ruling. But the decision could have  wider implications for consumer protection and privacy regs.

The court ruled that the FTC could not enforce consumer protections--including against unfair and deceptive practices on the privacy front--on any of the activities of a common carrier, including its noncommon carrier businesses

That could conceivably immunize the non-common carrier holdings of broadband common carriers like AT&T and Verizon—or Google Fiber--from Federal Trade Commission consumer protection regs, and, if those holdings were edge providers like, say a Yahoo!, the FCC could not regulate them either, at least under the current interpretation of FCC Chairman Tom Wheeler, who says the FCC lacks authority to regulate the edge.

The FCC had no comment on the ruling, saying its attorneys were still vetting the decision at press time.

“We are disappointed with the ruling and are considering our options for moving forward,” the FTC said in a statement.

“The Ninth Circuit Appeals Court decision has blasted a big deregulatory hole in between the jurisdictions of the FCC and the FTC, which could prompt a lot of unintended consequences in the space," said Scott Cleland, chairman of NetCompetition, an eforum backed by broadand companies. "Essentially what the FTC and FCC long assumed to be true about the reach of the FTC’s legal authority and jurisdiction is now not true. Market forces could rush to fill this new vacuum in the law.”

Driven by adoption among younger consumers, half of all online video starts will come via mobile devices by the end of 2015, online video publisher Ooyala predicts in a new report that tracks global video usage trends.

Nearly half of all video plays came on mobile in the second  quarter of 2015, with nearly eight times as many plays on smartphones as on tablets, Ooyala found in the  Global Video Index Q2 2015, a report based on anonymized online video metrics from the company’s Ooyala’s base of more than 500 customers, which include Telstra (Ooyala’s owner), ESPN, Univision, Sky Sports, Foxtel, NBCUniversal, and RTL of  Germany.

With respect to longer-form video (10 minutes or more), viewing by device was a bit more even – tablets (57%), connected TVs (53%), desktop (40%), and mobile phones (33%). For content running more than 30 minutes, connected TVs (52%) was tops, followed by tablets (36%), mobile phones (23%) and PCs (22%).

On the ad front, Ooyala found that 49% of all ad impressions for publishers were on mobile devices, up 11% from the previous quarter.

Broadcasters that streamed long-form premium content realized ad completion rates at or above 90%, Ooyala said.

OTT devices, a category that includes Roku boxes, the Apple TV and gaming consoles, represented the fastest growing segment when it came to ad-supported viewing of online video, FreeWheel found its Video Monetization Report for the second quarter of 2015.

Ad viewing on OTT devices rose 194%, good for a 10% share in Q2 2015, versus the year-ago quarter. That outpaced growth in other device segments, including smartphones (+107%), tablets and desktops/laptops (see chart).  Thirty-eight percent of ad views came from outside desktops and laptops. Q2 2015 marked the first time that smartphones surpassed 20% share of total video ad views, said FreeWheel, the online advertising firm acquired by  Comcast last year.

Though Roku is leading U.S. streaming device sales, according to Park Associates, it’s not out in front with respect to OTT video ad viewing. In Q2, Apple TV was on top, with a 39% share, up from 28% a year earlier.

The study also found that video ad views grew 32% year-over-year, with long-form on-demand and live content (20 minutes-plus) stoking that growth, rising 26% and 146%, respectively.

On the authenticated TV Everywhere front, MVPD app viewership surged 200% year-over-year, but accounted for just 4.5% of all programmer ad views, FreeWheel said. Overall authenticated viewing, meanwhile, rose 151%.

On an aggregate basis, overall online video views rose 25%, and ad views jumped 32%, the report found.

Much more about FreeWheel’s report will be featured in the Next TV section appearing in the August 31 issues of Multichannel News and Broadcasting & Cable.