4A’s and ANA Raise Concerns About Troublesome, Draft Federal Privacy Bill Ahead of Bill Markup

Ahead of a planned June 27 committee markupof draft federal privacy legislation,the American Privacy Rights Act (APRA), 4A's CEO Marla Kaplowitzand Association of National Advertisers (ANA) and CEO Bob Liodice sent a letterto the four corners of congressional leadership, Committee Chair Cathy McMorris Rodgers (R-WA), Committee Ranking Member Frank Pallone (D-NJ), and House and Senate committee staff to express their deep concerns about the APRA, including how the legislation will create significant impediments to the responsible, commercial use of data for any advertising activity.

In their strongly worded letter, the CEOs tell Congress that "the current draft of American Privacy Rights Act ("APRA") would eviscerate the modern advertising industry, devastate small and mid-sized businesses that depend on advertising to reach customers, force families to pay huge amounts of money for popular ad- supported digital services they use now for free or low cost, and drag down our nation's economic growth and innovation for decades to come." They go on to write that, "if adopted… the APRA would …outlaw common and accepted advertising practices like targeted advertising - simply delivering ads to people who want to see them -creating the most restrictive data regime for advertising data, a regime that is far more limiting than uses allowed for consumer financial and protected health information."

Among other requirements, the current version of the APRA would: (1) establish a limited set of permissible purposes for collecting, processing, and transferring covered data; (2) establish individual rights, including an opt-out via global privacy control; (3) create a do-not-collect mechanism for data brokers administered by the Federal Trade Commission; (4) impose a strong data minimization standard (5) preempt many, but not all state data privacy laws; and (6) create a private right of action for certain violations.

Specific to the advertising-related provisions, the APRA as currently drafted would:

• Subject targeted advertising to individual opt-out choice; however it would prohibit the use of the data needed to engage in targeted advertising. An "online activity profile," or information about an individual's activities over time across non-cobranded web properties, is deemed to be "sensitive covered data", subject to a requirement for affirmative express consent. A covered entity would also be required to provide a clear and conspicuous means to withdraw such affirmative consent.
• Adopt a structure that permits the commercial use of data only for an enumerated set of permissible purposes. As a result, with respect to advertising, any type of advertising using covered data that does not fit squarely within the draft's advertising definitions will be flatly banned.
  • Include advertising-related permissible processing purposes that seemingly limit processing to data that was "previously" collected under the terms of the draft APRA. Such purposes appear not to allow for the collection or retention of data at all for advertising. A covered entity could only process covered data for first-party advertising, contextual advertising, or targeted advertising (including email targeted advertising and direct mail targeted advertising) if it had already collected that covered data for a different purpose permitted by law.
• Require covered entities to flow down consumer's individual deletion and correction requests to third parties to ensure individual preferences and expectations are upheld (similar to the California Privacy Protection Act).
• Severely limit the types of contextual advertising allowed by prohibiting any tailoring based on the current viewer accessing the website or online service where the ad is displayed. For instance, showing a user a Mandarin ad based on their browser language might be banned because the law says ads can't be "tailored" to individual users, even for something as simple as language preference.
• Ban nearly all advertising to covered minors (U-17) by prohibiting all advertising using data about a covered minor.

While this legislation is still a discussion draft and amendments could be made as it moves through the legislative process, previous versions of the draft have included different iterations of similar provisions problematic to the industry.

The advertising industry, through its work with the Privacy for Americacoalition, has long advocated for reasonable federal privacy legislation that would increase consumer protection and choice while allowing for responsible business practices to continue to form the bedrock of the modern data-driven economy. Despite decades of tireless industry engagement and collaboration with Congress to promote the industry's strong commitment to consumer choice and responsible data use and proven track record of developing accountable self-regulatory paradigms and consumer privacy choice tools, recently debated federal privacy legislation, including the APRA and the 2022 American Data Privacy Rights Act (ADPPA)have taken a much stronger stance to attempt to limit unfettered commercial data use. The Privacy for America coalition also sent a letter to the committee leaders expressing their "strong opposition" to the APRA. In addition to calling out the APRA's detrimental impact on standard advertising practices, the letter flagged significant concerns related to the ability for nonprofits to target donors and volunteers and law enforcement's ability to use data to engage in fraud verification and crime prevention, among others.

Increasingly, and as a direct result of industry advocacy, the APRA faces an uncertain future in the 118th Congress. The number of legislative days to find a compromise amongst Congressional and industry stakeholders are dwindling, as the legislature has a number of important legislative priorities before it breaks for the 2024 campaign season, including trying to firm up FY2025's government funding bills; partisan divides on important sub-issues within the APRA may also tank the bill's future. In particular, inside the House of Representatives, opposition to the APRA continues to grow amongst GOP leadership, certain member delegations from states with their own privacy bills (as they do not favor the bill's preemption provisions), and a growing group of legislators concerned about the bill's impacts on small businesses. Whether a House floor vote on the APRA happens this year is still to be determined. The Senate has not yet taken up the APRA for committee consideration, although Senate Democratic Committee Chair Maria Cantwell has expressed support for the APRA in the past.

Have questions about APRA or the opposition letter sent by the 4A's and the ANA? Please contact Alison Pepper, 4A's EVP of Government Relations & Sustainability.

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