Op-Ed: FTC Risks Killing Digital Advertising, the Economy’s Golden Egg

This summer, the Federal Trade Commission announced the start of a process to regulate online data, a resource critical to the modern U.S. economy not just to constrain “Big Tech” but everyone else.

The completion of a three-month open comment period now opens the door for the agency to impose sweeping restrictions on the ability of small- and medium-size businesses to use personalized digital advertising to connect with customers.

New rules for what government ideologues call “commercial surveillance” could affect technologies from websites and social media to email marketing and basics like bookkeeping. This, in short, would comprise all digital data and information on the internet.

The FTC’s unilateral crusade to remake the digital economy would devastate businesses, especially start-ups and entrepreneurs across the country They use free or low-cost tools such as search engines, digital maps, streaming services and dashboards to drive their businesses. And these tools have become ubiquitous in our daily lives.

Whether you’re an entrepreneur, mom-and-pop shop, or casual internet surfer, FTC regulations to “protect consumers” and “increase competition” would raise costs, limit your e-commerce and content choices, and generally degrade your online experience. The irony is that while Washington is spending billions of dollars on building broadband internet infrastructure, the FTC is simultaneously working to eliminate digital content and services Americans want and need.

Digital advertising, which the FTC singles out as particularly harmful and dangerous, subsidizes the most popular and reliable news sites, email and online voice communications, video and photo sharing, and streaming music, TV and movies. The effects of the FTC’s war against advertising would be widespread and felt across every industry.

More than 17 million American jobs depend on the commercial internet, which contributed $12.45 trillion to the economy in 2020, a 22 percent growth rate over four years, according to the latest study from the Interactive Advertising Bureau.  Americans value ad-supported content and services at thousands of dollars annually, according to the Massachusetts Institute of Technology. It could all come crashing to an end.

Yet the FTC, in implementing its destructive agenda, would leave the largest tech companies and businesses more powerful than before. And the commission is defying Congress and its own rules in the process.

Clearly, the FTC, traditionally an enforcer against monopolies and champion of consumer protections, has little to no authority to enact sweeping regulations to remake the entire economy. As a workaround, commissioners are redefining the internet as under threat from “commercial surveillance,” claiming products and services that consumers demand and enjoy are “unfair” and “deceptive.” But this is an abuse of the commission’s powers.

The FTC has refused to state its objectives clearly and suggest alternatives to massive regulation, as required by law. In public forums and websites, commission staff engages in rhetorical questions that effectively lead the witness, in this case the American public. In the advertising industry, we call that “false advertising,” and it deserves as much scrutiny as any actual consumer harm.

Fortunately, bad actors in digital advertising are few and far between, and the industry is constantly working to prevent threats to online privacy and unfair or deceptive acts. However, the biggest threat to consumers may be a lack of awareness of how important digital advertising is to ordinary people, not only the leading ad agencies, technology firms, consumer brands and publishers that the Interactive Advertising Bureau represents.

Internet for Growth — a nationwide coalition of small businesses and creators who rely on personalized, digital advertising — is working to increase understanding of the ad-supported internet’s economic, social and cultural benefits. Like too many things these days, it’s become a political football in Washington, where partisan power struggles threaten Americans’ livelihoods in every state and congressional district. Healthcare providers, Realtors, barbers, educators and restaurateurs recently shared that message with the FTC in an open letter.

The next few months will be critical for the future of online advertising and the economy as the agency aggressively pursues its agenda to stifle a technology and its advantages that too many are taking for granted.