Early last week, Senator Cory Booker (D-NJ) and Congresswomen Anna Eshoo (D-CA) and Jan Schakowsky (D-IL) introduced a new bill, the Banning Surveillance Advertising Act, which would prohibit ad tech companies and other advertisers from engaging in targeted or "surveillance" advertising. Targeted advertising is defined under the bill as the dissemination of ads based on personal information that an advertiser has either (1) purchased or otherwise obtained from another person or that (2) identifies an individual as a member of a protected class (e.g. race, gender, and religion.) See the Banning Surveillance Advertising Act.
When introducing the bill, Congresswoman Eshoo stated that surveillance advertising "allows online platforms to chase user engagement at great cost to our society, and it fuels disinformation, discrimination, voter suppression, privacy abuses, and so many other harms." See Eshoo Press Release. Senator Booker likewise stated that surveillance advertising "is a predatory and invasive practice [which] drives the spread of extremism, racial division, and violence." See Booker Press Release.
Two notable exemptions from the bill's expansive prohibition of targeted ads include contextual advertising as well as broad location targeting to a recognized place (e.g. a municipality). See id. and the Act's Briefing Background. Contextual advertising is defined in the bill as advertising based on information that an individual "is viewing or with which the individual is otherwise engaging" or information for which the individual searched. See id. In other words, advertisers could continue to use a consumer's search terms or any website content a user engages with as a basis for serving targeted ads.
The bill grants enforcement authority to the Federal Trade Commission and to state attorneys general, while also providing citizens with a private right of action. Civil actions under the bill allow for awards of no more than $1,000 per negligent violation and up to $5,000 for reckless, knowing, willful, or intentional violations.
Despite garnering support from public interest organizations like the Center for Digital Democracy and companies like DuckDuckGo, the bill has also received criticism from groups like the Interactive Advertising Bureau ("IAB"). See Booker Press Release. In a press release, the IAB emphasized that the bill would jeopardize small- and medium- sized businesses, stifle innovation, and effectively eliminate the "creator economy" and internet advertising at large. See IAB Press Release.
Currently, only Democrats have sponsored the bill, which makes its path to passage difficult in such a closely divided Congress. That path may be made more difficult by questions about whether it (or similar bills) violate advertisers' First Amendment rights. Although targeted advertising is unlikely to constitute protected speech, commercial speech is nonetheless protected by the First Amendment and bills which regulate commercial speech are subject to the test outlined in the 1980 Supreme Court case Central Hudson. The Central Hudson test would require that the government (1) assert a substantial interest; (2) demonstrate that the Banning Surveillance Advertising Act directly advances that interest; and (3) demonstrate that the regulation is not more extensive than necessary to serve that interest.
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