Reports from sources on Capitol Hill indicate a digital advertising tax has been mentioned as a source of revenue to pay for the Senate’s bipartisan infrastructure bill negotiated by the so-called “Gang of 10/Gang of 21.” AAF members are encouraged to contact their Senators—especially if he or she is among the negotiating Senators—and let them know they should oppose an effort to tax digital, or any other advertising. An issue brief from the AAF supported Advertising Coalition gives more background on the issue.
The original Gang of 10 includes Senators Bill Cassidy (R-La.), Susan Collins (R-Maine), Joe Manchin (D-W.Va.), Lisa Murkowski (R-Alaska), Rob Portman (R-Ohio), Mitt Romney (R-Utah), Jeanne Shaheen (D-N.H.), Kyrsten Sinema (D-Ariz.), John Tester (D-Mont.), and Mark Warner (D-Va.).
They have since been joined by Senators Richard Burr (R-N.C.), Chris Coons (D-Del.), Lindsey Graham (R-S.C.), Maggie Hassan (D-N.H.), John Hickenlooper (D-Col.), Mark Kelly (D-Ariz.), Angus King (I-Maine), Jerry Moran (R-Kansas), Mike Rounds (R-S.D.), Thom Tillis (R-N.C.), and Todd Young (R-Ind.).
The idea is of suggesting a tax on digital advertising is unsurprising as many states have already considered the idea, most notable Maryland which has enacted such a tax. The Maryland tax is currently being challenged in federal court.
Lina Khan, a vocal critic of the tech industry and antitrust expert has been sworn in as the new Chair of the Federal Trade Commission.
She is a proponent of aggressive antitrust enforcement, including against large and prominent tech companies. While a federal judge recently dismissed the FTC’s antitrust lawsuit against Facebook, the agency has until late July to file a new complaint. Under Khan’s leadership, many observers expect the Commission to do so.
In her April confirmation hearing Khan expressed concern about behavioral advertising, “There are some really interesting questions to be asked specific to behavioral ad-based business models, insofar as these business models really incentivize endless vacuuming up of data. I worry that in some cases, some of these companies may think it's just worth the cost of business to actually violate privacy laws.”
Soon after her becoming Chair, the commissioners voted 3-2 to streamline its process to develop new rules for unfair or deceptive business practices under Section 18 of the FTC Act. The changes include shifting oversight of the process from an administrative law judge to the FTC chair, eliminating a staff report on proceedings and cutting some public comment periods. The new process would govern any new rules developed by the Commission on data privacy.
In a related action, President Joe Biden recently signed an executive order that includes a provision urging the FTC to consider issuing regulations regarding “unfair data collection and surveillance practices that may damage competition, consumer autonomy, and consumer privacy.”
AAF continues to believe consumers, businesses and the economy benefit from the responsible use of data. The AAF supported Privacy for America Coalition recently published a blog post highlighting the unintended consequences of restricting responsible data use.
AAF and Privacy for America support the passage of federal privacy legislation. Numerous bills have been introduced in Congress. One of the most recent is the Data Protection Act by Senator Kirsten Gillibrand (D-NY). The bill would create an independent Data Protection Agency to “protect Americans’ data, safeguard their privacy, and ensure data practices that are fair and transparent.”
As anticipated, Colorado Governor Jared Polis (D) signed into law privacy legislation regulating data and consumer privacy in the state. Upon signing the measure, he also released a statement calling for additional legislation to address many outstanding issues and insure that the Colorado law protects privacy while also “ensuring Colorado’s competitiveness with other states as an incubator of new technologies and innovations.” AAF, together with allies in the state and Washington, DC submitted comments on the measure and will continue to engage with lawmakers as they consider revisions. Upon passage, Privacy for America issued a press release stating passage of the measure underscored the need for a uniform federal data privacy law.
As reported in the last issue of Government Report, lawmakers in Connecticut convened in a special legislative session and considered a budget measure which included a number of privacy provisions (pages 80-102). AAF provided comments to lawmakers addressing the issues. The Connecticut House subsequently removed the privacy provisions from the bill, SB 1202. The House passed House Schedule A LCO# 11000 (D), which removes the privacy provisions (see lines 42 and 43 of the amendment) by voice vote (see page 37). This Bill Analysis for SB 1202, as amended, confirms that the privacy provisions have been removed (page 4).