Accountable Tech has recently filed a petition for an FTC rulemaking that would ban “surveillance advertising” as an “unfair method of competition.” The group cites the ad practices of surveillance ad giants like Facebook, Google and Amazon.
The petition notes that President Biden’s Executive Order encourages the FTC to use its rulemaking authority to address “unfair data collection and surveillance practices” that harm competition, consumers and society. The FTC voted in September to allow members of the public to petition the agency to issue rules.
Accountable Tech asserts that surveillance-based advertising is an inherently unfair method of competition which both relies upon, and cyclically reinforces, monopoly power. “Because many digital markets are prone to “tipping”—whereby early competition is for the entirety of the market—dominant firms have gained access to massive user bases and self-perpetuating data advantages that provide high barriers to entry and easy leverage into adjacent markets.”
“On this foundation, surveillance advertising fuels a toxic feedback loop: dominant firms are uniquely situated and incentivized to (1) unfairly extract and monetize more user data; (2) unfairly integrate that data across business lines; and (3) actively suppress competition. As this flywheel accelerates, so too does the race to the bottom amongst rivals seeking to close ever-widening data gaps.”
Accountable Tech further asserts that “consumers also suffer directly from surveillance advertising. For users of nominally “free” products, paid for in the form of personal data and attention, each new invasion of privacy and degradation of services is an effective price hike.” It further asserts that there exists a legal basis for rulemaking under “unfair methods of competition,” You can read the petition, here.
Richard B. Newman is an FTC defense lawyer at Hinch Newman LLP.
Informational purposes only. Not legal advice.