Internet Privacy regulations approved in the final stages of President Obama’s administration would have required Internet service providers (ISPs) to obtain express opt-in consent before certain sensitive consumer data could be shared or sold for behavioral advertising purposes. On the eve that the rules were to take effect a resolution was introduced that sought to invalidate them by way of the Congressional Review Act.
After making its way through the Senate and House, as expected, President Trump has signed the resolution. The regulations will now never be implemented.
While the big ISPs have repeatedly reiterated that they do not plan to trade in individual browsing histories and violate their privacy promise, many are skeptical.
What’s happening to Internet privacy?
The Congressional Review Act permits Congress to disapprove of and undo regulations.
A coalition of advertising groups immediately supported the resolution, citing concerns that the regulatory regime was not aligned with the FTC’s privacy approach and was an unconstitutional restriction on free speech.
“The creation, analysis, and transfer of consumer data for marketing purposes constitute speech,” the groups wrote.
Lobbyists for cable and wireless companies pointed to the FCC’s provision of one set of regulations for broadband providers and another for data collectors and digital advertising companies (e.g., Google and Facebook). FCC Chairman Ajit Pai, who opposed the rules enacted under Obama, said
“The privacy regulations were designed to benefit one group of favored companies over another group of disfavored companies.”
Senate Minority Leader Charles Schumer called on Trump to veto the bill.
“If President Trump clicks his pen and signs this bill, consumers will be stripped of critical privacy protections in a New York minute,” Schumer stated.
What does this Internet privacy rule mean for you?
There exists one school of thought that the bill merely enables the implementation of a comprehensive privacy framework by restoring the Federal Trade Commission’s authority to police the privacy practices of ISPs.
Internet privacy advocates are concerned because they believe that the repeal will make the selling of consumer data the default setting that benefits ISPs while eroding the privacy rights of consumers that are unaware that they are able to opt-out.
Many believe that Internet service providers (including, wireless data providers) are now better able to compete for brand advertising dollars by trading in and profiting from their users’ data, without consent.
Such data includes geographic location, health or financial information, browsing and app-usage histories, name, address, IP address, and subscription level.
The rollback also prevents the FCC from enacting regulations that are substantially similar, in the future.
The bill was part of an effort that Republicans have undertaken, and continue to undertake, to void a number of regulations issued toward the conclusion of the Obama administration.
Leveling the playing field?
Online advertisements are the reason we enjoy rich, free Internet content. The majority of websites that everyone visits are sharing data with third-parties, such as advertising networks, for behavioral targeting purposes. In short, the average user will hardly notice a difference.
Privacy advocates believe that ISPs have now entered the world of digital marketing.
ISPs may very well offer unique cross-device capabilities to advertising networks looking for new and innovative ways to find a targeted audience. The reversal is a win for service providers such as Verizon and Comcast, who it appears is now permitted to monitor users’ online behavior and sell the data collected to the highest bidder for promotional purposes.
Richard B. Newman is an FTC defense lawyer and advertising compliance attorney at Hinch Newman LLP focusing on marketing and digital media matters. His practice includes conducting legal compliance reviews of advertising campaigns, representing clients in investigations and enforcement actions brought by the Federal Trade Commission and state Attorneys General, commercial litigation, advising clients on promotional marketing programs, and negotiating and drafting legal agreements.
HINCH NEWMAN LLP. ADVERTISING MATERIAL. These materials are provided for informational purposes only and are not to be considered legal advice, nor do they create a lawyer-client relationship. No person should act or rely on any information in this article without seeking the advice of an attorney. Information on previous case results does not guarantee a similar future result.
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