Federal legislators will soon be considering two different bills that would impact online advertising: a privacy bill that could restrict certain marketing practices and a financial reform bill that contains language giving the Federal Trade Commission greater rulemaking authority. Congressman Rick Boucher (D – Va.), chair of the House Energy and Commerce Subcommittee on Technology and the Internet, plans to introduce a consumer privacy bill in the coming months.

“Where I want to go with this is generally opt out,” Rep. Boucher told reporters. “If I were [a publisher or advertiser], I would want Internet users to have a sense that their experience is more secure, that they know what information is collected about them, and they be given much more control. They will be more trusting of electronic commerce. . . .it’s good for business.”

The second proposed law, the Wall Street Reform and Consumer Protection Act of 2009, would remove existing limits on the FTC’s rulemaking capability and expand its enforcement powers. The Senate version of the bill does not contain these provisions, however.

With its new authority, the FTC would be able to issue financial penalties to violators and would also be able to hold companies liable for aiding and abetting violations of the law.

In response to the potential for increased authority, FTC Chairman Jon Leibowitz said that the industry “needs to do a better job of ensuring that consumers know what they are agreeing to with online advertising. The new rulemaking authority is really about hard-core fraud. It doesn’t make sense to initiate rule making where business practices and consumer attitudes are still evolving like behavioral targeting. . . .We prefer self-regulation.”

 

Why it matters: The recent passage of the health care bill means that federal lawmakers will now turn back to other issues, such as privacy and financial reform. Companies that advertise online should be aware that new legislation is a possibility. Twenty-nine advertising industry trade groups, such as the Interactive Advertising Bureau, the Direct Marketing Association, and the Association of National Advertisers, recently sent a letter to a Senate committee, expressing concern about giving the FTC greater authority.