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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Natalie Dugan

Natalie Dugan is an associate in the firm’s Washington, DC office and a member of the Data Privacy and Cybersecurity Practice Group as well as the International Trade Practice Group.

Natalie advises clients on a broad range of privacy and cybersecurity issues, including…

Natalie Dugan is an associate in the firm’s Washington, DC office and a member of the Data Privacy and Cybersecurity Practice Group as well as the International Trade Practice Group.

Natalie advises clients on a broad range of privacy and cybersecurity issues, including on topics related to privacy policies and data practices, responses to regulatory inquiries, and compliance obligations under U.S. state privacy regulations like the California Consumer Privacy Act. Her practice also includes helping clients navigate international trade policy and customs matters.

Photo of Terrell McSweeny Terrell McSweeny

Terrell McSweeny, former Commissioner of the Federal Trade Commission (FTC), has held senior appointments in the White House, Department of Justice (DOJ), and the U.S. Senate. At the FTC and DOJ Antitrust Division, she played key roles on significant antitrust and consumer protection…

Terrell McSweeny, former Commissioner of the Federal Trade Commission (FTC), has held senior appointments in the White House, Department of Justice (DOJ), and the U.S. Senate. At the FTC and DOJ Antitrust Division, she played key roles on significant antitrust and consumer protection enforcement matters. She brings to bear deep experience with regulations governing mergers and non-criminal, anti-competitive conduct, as well as issues relating to cybersecurity and privacy facing high-tech, financial, health care, pharmaceutical, automotive, media, and other industries. Terrell is internationally recognized for her work at the intersection of law and policy with cutting edge technologies including Artificial intelligence (“AI”), Digital Health, Fintech, and the Internet of Things (“IoT”). Clients benefit considerably from her extensive relationships with other enforcement agencies around the world.

Prior to joining the Commission, Terrell served as Chief Counsel for Competition Policy and Intergovernmental Relations for the U.S. Department of Justice, Antitrust Division. She joined the Antitrust Division after serving as Deputy Assistant to the President and Domestic Policy Advisor to the Vice President from January 2009 until February 2012, advising President Obama and Vice President Biden on policy in a variety of areas.

Terrell’s government service also includes her work as Senator Joe Biden’s Deputy Chief of Staff and Policy Director in the U.S. Senate, where she managed domestic and economic policy development and legislative initiatives, and as Counsel on the Senate Judiciary Committee, where she worked on issues such as criminal justice, innovation, women’s rights, domestic violence, judicial nominations, immigration, and civil rights.

Photo of Lindsey Tonsager Lindsey Tonsager

Lindsey Tonsager helps national and multinational clients in a broad range of industries anticipate and effectively evaluate legal and reputational risks under federal and state data privacy and communications laws.

In addition to assisting clients engage strategically with the Federal Trade Commission, the…

Lindsey Tonsager helps national and multinational clients in a broad range of industries anticipate and effectively evaluate legal and reputational risks under federal and state data privacy and communications laws.

In addition to assisting clients engage strategically with the Federal Trade Commission, the U.S. Congress, and other federal and state regulators on a proactive basis, she has experience helping clients respond to informal investigations and enforcement actions, including by self-regulatory bodies such as the Digital Advertising Alliance and Children’s Advertising Review Unit.

Ms. Tonsager’s practice focuses on helping clients launch new products and services that implicate the laws governing the use of endorsements and testimonials in advertising and social media, the collection of personal information from children and students online, behavioral advertising, e-mail marketing, artificial intelligence the processing of “big data” in the Internet of Things, spectrum policy, online accessibility, compulsory copyright licensing, telecommunications and new technologies.

Ms. Tonsager also conducts privacy and data security diligence in complex corporate transactions and negotiates agreements with third-party service providers to ensure that robust protections are in place to avoid unauthorized access, use, or disclosure of customer data and other types of confidential information. She regularly assists clients in developing clear privacy disclosures and policies―including website and mobile app disclosures, terms of use, and internal social media and privacy-by-design programs.