Black Swans, The Coronavirus, and Digital Advertising

The coronavirus pandemic is that extraordinary Black Swan event everyone fears, yet for which no one can be fully prepared. In a mere matter of weeks, “zoom” has acquired a new meaning. Students and teachers are interfacing via online classrooms. Grandparents are watching their grandkids grow up virtually. Online shopping is straining the capability of delivery services. Businesses are holding meetings online. Unemployment applications are being submitted on computers. Stimulus checks are being deposited directly into taxpayer accounts. Multiple digital providers are conveying information about social distancing and providing opportunities for social connections. The list goes on and on. The coronavirus pandemic has surely shown us the importance of the online world and our reliance on it. The digital revolution, fueled and sustained in large part by the financial support provided by advertising, clearly provides a critical element in our lives today. Without digital interlinked markets and broad social networks, the disruptive potential of epidemics, and even pandemics, would be dramatically magnified.

As the unprecedented social and economic costs of the pandemic have struck home, all of us are now searching for answers as to how to maintain, to the maximum extent possible, business activities and the requirements of everyday life. And the security of information sent online has become even more important, as financial, health and other sensitive information is being transmitted digitally.

The pandemic has imposed these new necessities on us, and one might expect that policymakers would be eagerly embracing a privacy paradigm to ensure the integrity of the online world. ANA has been advocating for just such a system, working through Privacy for America (P4A), a coalition directed toward the adoption of a comprehensive national privacy proposal that will create uniform strong enforceable privacy rights across the United States. Now more than ever, we need one set of rules – not dependent on geographical boundaries – that guarantees the security of consumer information and that provides businesses with certainty about their responsibilities. The P4A framework changes the way personal information is protected and secured, as it does not rely on burdensome “notice and choice” schemes to protect personal information. Rather, it would clearly define and prohibit practices that put personal information at risk or undermine accountability, while preserving the benefits to individuals and our economy that result from companies responsibly using data to advertise and market to consumers. To assure that these rules will effectively protect consumers and the competitive marketplace, the P4A proposal dramatically strengthens the enforcement authority, funding and manpower of the Federal Trade Commission in the privacy area. Legislators and regulators should be working on adopting just such an approach right now when the need for secure online activities has never been so clearly and dramatically demonstrated.

Sadly, many legislators and regulators have focused their attention elsewhere and continue to fail to take the steps necessary to strengthen and support digital networks and advertising. For example:

• The California Attorney General has resisted delaying the implementation of the California Consumer Privacy Act, even though regulations spelling out consumer rights and business obligations are still not yet finalized. During the pandemic, many federal, state, and local regulators and courts – as well as some overseas – have granted substantial delays in compliance so that businesses can focus on responding to the pandemic. But businesses and advertisers still face an impending deadline on the extensive and extremely complex CCPA regulations without knowing the rules of the road. This approach is clearly highly disruptive and counterproductive.

• The Maryland Legislature has passed an unprecedented tax on digital advertising. This unconstitutional and misguided bill would actually undermine the online world, as the tax would undercut the benefits digital advertising provides to Maryland consumers. The tax would be passed on to them – at the worst possible time, in the midst of the coronavirus pandemic and a severe economic downturn.

• The State of Michigan is laboring under an emergency Executive Order that unfairly singles out advertising by large businesses, which almost certainly violates the First Amendment of the Constitution. This Order does not explain why advertising in large outlets is less safe than other advertising, and it is so vague that it is hard to identify what is and is not within the ban. At a time when communications and information media are essential, this Order undermines the capacities of news organizations and limits the economic support for their programming.

Perhaps the explosive growth of digital media and markets has led many to take the digital ecosystem for granted. But piling on the kinds of excessive burdens we are seeing today will cause the internet to become less useful and available. Rather than scattershot approaches, the focus should be where it needs to be supporting the online world, including digital advertising. This support needs to foster the rapid development of a national privacy regime which will greatly enhance the continued health and the enormous benefits digital data and digital advertising now provides.