On November 21, 2022, Consumer Federation of America and Consumer Action submitted comments to the Federal Trade Commission (FTC) in response to its Advance Notice of Proposed Rulemaking on Commercial Surveillance and Data Security. Consumer Action, a CFA member, has been a champion of underrepresented consumers since 1971.

CFA also joined other groups in comments submitted by Fairplay that specifically focus on children’s privacy. In addition, CFA supports comments in this proceeding from the Electronic Privacy Information Center.

In their comments, CFA and Consumer Action made three main points:

• The FTC should prohibit surveillance advertising, which shows individual consumers advertisements based on inferences about their interests, demographics, and other characteristics drawn from tracking their activities over time and space, because it is inherently unfair and deceptive. This practice uses invisible and invasive techniques to manipulate consumers and rob them of real choice in the marketplace. Furthermore, the benefits of surveillance advertising do not outweigh the harms, and relevant ads can be delivered to consumers in a much less privacy-intrusive manner through contextual advertising, which is when the content of an ad is directly related to the content of the webpage a person is viewing (for instance, delivering an ad for rental cars when someone is looking at information about traveling to a vacation destination).
• It is crucial to set rules for data minimization to protect consumers from excessive collection, use, and sale of their data (including sharing their data in exchange for monetary or other forms of valuable consideration). The absence of such protection can result in a range of harms. The FTC should limit the collection, use and sale of data that can be linked to individual consumers to what is necessary to provide them with the products or services they have requested and for other specific permissible purposes.
• While notice can be useful to consumers and others, the FTC should not over-rely on notice to address the concerns that surveillance advertising raises. Even if notices about companies’ data practices are simplified and standardized, as they should be, not all consumers will read them, and those who do may find it difficult to fully understand the potential impact of these practices. Furthermore, consent to companies’ data practices can be illusory if consumers must agree to obtain the information, goods or services they want.

As CFA and Consumer Action point out, even if notices about data practices are improved and “dark patterns” to manipulate consumers’ choices are prohibited, there will always be asymmetries in the balance of knowledge and power between commercial entities and consumers. In the case of surveillance advertising, which by its very nature is not obvious to consumers, notice and consent cannot substitute for limitations and requirements that protect them from unfair and deceptive acts or practices in the collection, use and sale/sharing of their personal information.

“Except for necessary operational purposes such as fraud control, secondary uses and sharing of consumers’ data should simply be prohibited” said Susan Grant, a Senior Fellow at CFA.

“Consumers must be able to limit or prevent the uncontrolled access to data that is used to create their invisible profiles that can cause irreparable harm when shared or sold,” noted Ruth Susswein, Consumer Action’s Director of Consumer Protection.