Government Report

View the August 03, 2023 Government Relations Report.

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Government Report

View the July 12, 2023 Government Relations Report.

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Government Report

View the June 29, 2023 Government Relations Report.

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Government Report

States Consider/Act on Privacy Laws

Action on state privacy issues remains quite hectic as many states reach the end of their 2023 legislative sessions.

New laws have been enacted in numerous states.

In Washington, Governor Jay Inslee (D) signed into law a measure addressing the collection, sharing and selling of consumer health data. While AAF strongly supports appropriate limitations on the use of consumer health data, AAF believes the new law’s overly broad definition of consumer health data would impede Washington consumers from receiving useful and relevant information about products and services they may desire. We expressed our concerns in a letter to lawmakers and to the Governor requesting he veto the bill.

Arkansas Governor Sarah Huckabee Sanders (R) approved a new law requiring age verification on social media and limiting Internet access to anyone under the age of 18. While well intentioned, the law raised constitutional concerns, would limit Arkansas minors’ ability to access information online, and could unintentionally expose Arkansas minors to harm. AAF expressed these concerns in letters to legislators and the Governor requesting a veto of the measures.

A similar “Age-Appropriate” bill was introduced in Minnesota. AAF was joined by AAF Central Minnesota and AAF District 8 in expressing our concerns.

Indiana Governor Eric Holcomb (R) recently signed a privacy protection measure into law. As of this writing, similar measures are awaiting approval in Tennessee and Montana. AAF does not support the enactment of state privacy laws as we believe in a national privacy law protecting all U.S. citizens consistently. However, we chose not to expend limited resources opposing these measures as they are relatively reasonable and mostly – if not entirely— consistent with laws enacted in other states.

Lawmakers in Florida are facing a May 5, deadline to finish their legislative session. Privacy is one of many measures being considered in the final hours. AAF and our local Florida Ad Clubs have been in near constant communication with legislators regarding the proposed privacy bills with letters sent April 3, April 12, April 13, April 20, May 3 (House), and May 3 (Senate) responding to the most recent developments.

AAF has also submitted letters to lawmakers in New York and Vermont responding to proposed privacy bills.

Federal Privacy Bills Introduced

Representatives Anna Eshoo (D-CA) and Zoe Lofgren (D-CA) reintroduced the Online Privacy Act, comprehensive privacy legislation that creates user data rights, places limitations and obligations on the ability of companies to collect and use user data and establishes a Digital Privacy Agency to enforce privacy laws.

Senators Brian Schatz (D-HI), Tom Cotton (R-AR), Chris Murphy (D-CT) and Katie Britt (R-AL) have introduced legislation that would require social media platforms to verify users’ ages, prohibit teens under 18 from using social media without parental consent and completely ban children under 13 from social media. It would also would prohibit social media platforms from using algorithms — defined as fully or partially automated systems—to recommend material to teens.

Senators Bill Cassidy (R-LA) and Edward Markey (D-MA) announced the reintroduction of COPPA 2.0. The bill contains a broad definition of “targeted marketing” and prohibits the activity for children and teens.

Representative Kathy Castor (D-FL) has reintroduced the Kids PRIVACY Act that would restrict online companies from collecting teens’ data.

AAF supports appropriate protections for children’s and youth privacy, but believes it should be done in the context of comprehensive privacy legislation.

The AAF supported Privacy for America sent a letter to leadership of the House Energy and Commerce Committee and its Oversight and Investigations Subcommittee in connection with its April 19 hearing on the role of data brokers in the digital economy and online privacy protections. The letter encourages the Subcommittee to not create unreasonable barriers to effective and responsible use of data as it works to advance comprehensive national data privacy legislation.

Digital Advertising Alliance

Digital Advertising Alliance is Expanding its Industry Integrations for Consumer Choice Tools Regarding Interest-Based Advertising, and Enhancing its Political Ads Platform for Election 2024

The Digital Advertising Alliance (DAA)—of which AAF is a founding association—joined AAF members who participated in our 2023 Advertising Day on the Hill.

The DAA’s community’s strength has come from its foresight and its proactive actions to codify and live by responsible industry practices. Those practices and that commitment has allowed our industry to help shape policy debates, media and consumer attitudes.

This quarter, numerous large-scale projects are being worked on inside DAA which may be important to AAF members who vet and evaluate ad tech players on behalf of their clients.

CMP CoMPlement: This past quarter, DAA announced its plan for working with consent management platforms or providers (CMPs). The CMP CoMPlement project consists of interface guidance and an integration specification (a signal and API) that CMPs can use to bridge consumer choices between the DAA and their own respective offerings, utilizing the ubiquitous AdChoices icon  . While it’s named the “CMP CoMPlement,” the work also applies to customer data platforms (CDPs) and any other third party that handles consumer consent signals. To learn more about this initiative and to get the CMPs you work with involved, please get in touch with DAA’s Jamie Monaco (cmp@aboutads.info).

Political Ad Icon Serving & Ad Database: Demand-side platforms and publishers alike will want to pay attention to the services offered through the updated purple icon program, the DAA Political Ad icon. The DAA’s program features a self-serve icon-serving platform that participants (campaigns and PACs, directly or through their agencies) can use to place transparency information atop their political ads—much as the blue AdChoices icon does for privacy information. This election cycle, the DAA also offers an ad database to store ad creatives for up to five years—that can serve as a state registry. Both the icon serving and ad database have an API for integration. To explore Political Ad icon licensing and platform participation, click here.

Addressable Media Identifiers: If AAF-member agency clients rely on private-sector offered identity solutions to maintain consumer/brand engagement across sites, apps, platforms and browsers, then now is the time to demand DAA certification on these these AMI solutions—to assert, through an independent third party, that such solutions adhere fully to the DAA-administered AMI Policy Framework. We are also asking brands and publishers now to include DAA-certified AMIs in their RFPS, policies and contracts. Point your identity service providers here to initiate the AMI certification process

More Than Token Change: DAA’s YourAdChoices—a transparency and consumer control tool for token opt-out/revocation is already in market—using hashed email addresses as advertising identifiers. The DAA is now in process of testing an opt-out tool for hashed phone numbers (initially focusing on smartphones)—to provide similar choice, through a verified process. For those ad tech companies using DAA’s WebChoices and AppChoices, who may be turning to token identifiers as cookie and mobile ad identification alternatives or supplements, now is the time to sign up for testing. To get started, use the “YourAdChoices” tick box on our choice tools integration form.

These are not the only DAA initiatives underway now. AAF will continue to brief its members on these necessary tools and protocols to enhance consumer engagement and help build trust through enhanced transparency and control—no matter what state and federal laws may pass.

Government Report

AAF Advertising Day on the Hill a Success

AAF’s March 23 Advertising Day on the Hill was a rousing success. Forty AAF members from 19 states and the District of Columbia attended. They were briefed by speakers from the Federal Trade Commission and advertising self-regulatory programs and learned about the important issues confronting the industry, including privacy and data security and preservation of the federal tax deductibility of advertising expenses.

After a morning of preparation, the attendees went to Capitol Hill for meetings in more than 60 House and Senate offices to explain to lawmakers and their staffs the importance of a vital and healthy advertising industry to their states and congressional districts.

As a grassroots organization, Advertising Day on the Hill is one of AAF’s most important programs. We are grateful to the dedicated volunteers who traveled to Washington, DC, to advocate for their businesses and the advertising industry. We are grateful to our sponsors TikTok, Capitol Counsel, the Digital Advertising Alliance and Venable for helping to make Advertising Day on the Hill possible.

In addition to AAF National, many local chapters are conducting legislative days. Former AAF District 10 and current Council of Governors Secretary-Treasurer Stephanie Price reports:
On March 1, District 10 hosted our virtual District-wide Day at the Capital event. We had over 50 participants from TX, AR, OK and LA learn about privacy and advertising issues from the AAF platform along with an afternoon of legislative meetings. This is the first time a joint virtual day has been held and it was a wonderful success. We want to thank guest speakers Clark Rector, AAF EVP Government Affairs and Duff Stewart from GSD&M along with the legislators and staffers who took time to meet with our club leaders. We plan to continue hosting this event.

On March 23, seven AAF Nebraska members participated in the club’s Day Under the Dome. Participants met with seven Senators and the staffs of four more. Nebraska is the only state with a unicameral legislature. The group also had an audience with Governor Jim Pillen (R) to talk to him about the importance of advertising to the Nebraska economy.

Privacy Takes Center Stage in the States

As anticipated, 2023 has been a busy year for privacy issues in the states. AAF and our allies, in many cases joined by local AAF clubs, have provided comments to state lawmakers from coast to coast. We are grateful to the local clubs who sign our letters, often with short notice, as their local voice is powerful when speaking to state lawmakers. We apologize for those instances when time constraints make local participation impossible.

The primary message of our comments is consistent from state to state. AAF supports a law enacting robust privacy and data security protections for consumers. However, we support federal legislation protecting all consumers nationwide. State laws, however well-intentioned, would create a patchwork of inconsistent standards making it difficult, if not impossible, for businesses to comply—especially smaller businesses working with fewer resources. While stating our opposition, we will also offer suggestions making the proposed laws more closely align with standards in other states.

In March, AAF and eight Texas advertising clubs (AAF Amarillo, AAF Austin, AAF Corpus Christi, AAF Dallas, AAF East Texas, AAF Houston, AAF Rio Grande Valley, and AAF San Antonio) sent a letter to Texas lawmakers opposing comprehensive privacy legislation. Special thanks to Helena Abbing of AAF Austin for submitting online testimony—required to come from an in-state source—prior to the legislative hearing. Later in the month, AAF, joined by AAF Austin and AAF Houston submitted comments on an “age appropriate” privacy bill we believe would not only have not protected children, but impeded older youths from accessing the benefits of online information.

Together with AAF Seattle, AAF Spokane and AAF Tri Cities, AAF wrote to Washington state lawmakers about legislation designed to protect consumer health data, but going much further than would be necessary or beneficial to consumers.

AAF, joined by AAF Central Minnesota and AAF District 8, wrote to Minnesota House and Senate legislative leaders regarding flawed “age appropriate” bills (SF 2810 and HF 2257).

Similarly, in Florida AAF wrote to Senators and Representatives opposing privacy bills, HB 1547 and SB 262. AAF was joined on the letters by AAF District 4, AAF Orlando, AAF Space Coast, AAF Treasure Coast, and Ad 2 Orlando.

Other states where AAF filed comments on privacy related legislation included Arkansas, Connecticut, New Hampshire, Illinois (HB 1381, HB 3385, and HB 3880) and Maryland (SB 698 and SB 844).

In other privacy news, Utah Governor Spencer Cox (R) signed into law HB 311 which banned any form of advertising on social media to minors, defined as anyone under the age of 18. AAF wrote to the Governor urging him to veto the measure because we believe it is overly broad, unconstitutional and would harm more than help underage users of social media. The new law will likely be challenged in Court.

Iowa Governor Kim Reynolds (R) has signed into law comprehensive privacy legislation. While AAF favors a national privacy law and does not support state privacy legislation, we chose not to engage in Iowa as the enacted law created an acceptable balance between consumer protection and business requirements.

Colorado Attorney General Phil Weiser (D) has finalized rules to implement the Colorado Privacy Act. AAF and AAF Colorado provided comments to the Attorney General’s office.

Nevada Considers a Tax on Data

Nevada lawmakers are considering AB 421, which would impose a tax on businesses use of data which would increase the costs of online advertising resulting in harmful effects to businesses and consumers. AAF and many allied associations, including AAF District 14 and AAF Las Vegas wrote to lawmakers expressing our objections to the tax. In addition, AAF District 14 Governor Kurt Thigpen testified before the Assembly Committee on Revenue in opposition (testimony begins at approximately 1:13:05). Future action on the measure is unclear at this writing.

AAF Supports Challenge to Maryland Digital Advertising Tax

In 2020, the Maryland General Assembly passed a tax on digital advertising, which was enacted when the legislature overrode the veto of then Governor Larry Hogan (R). AAF EVP of Government Affairs Clark Rector testified in Annapolis against the tax. Challenges to the tax have been moving through the Maryland Courts. AAF has joined an Amicus Brief filed with the Maryland Supreme Court in support of the challenge by Comcast and others currently pending before the Court. Oral arguments are tentatively scheduled for May.

Government Report

State Privacy Update

In Washington state, legislation has been introduced to enact significant privacy protections for Washingtonian’s consumer health data. AAF agrees all consumers deserve appropriate privacy protections, especially about sensitive health information. However, as currently written, the bill is broad and would have unintended consequences, unnecessarily limiting Washington consumers from receiving information about many non-sensitive products and services they may desire. AAF, and local chapters AAF Seattle, AAF Spokane and AAF Tri-Cities, submitted a letter to lawmakers expressing our concerns.

In Colorado, where legislation has passed, the state Attorney General’s office released a second draft of proposed regulations implementing the law. AAF, together with AAF Colorado and other allied trade associations, submitted comments suggesting changes to help ensure the regulations are consistent with the law, align as much as possible with other state approaches to privacy regulation, and are protective of consumers while remaining workable for businesses.

Virginia lawmakers are considering a bill that would address children’s privacy issues, including defining as a child any person younger than 18 years of age. AAF wrotelawmakers agreeing children deserve special protections but pointing out the federal Children’s Online Privacy Protection Act (COPPA) already requires parental consent for many online processing activities associated with personal data collected from children under the age of 13 and the Virginia Consumer Data Protection Act (VCDPA) acknowledges that companies in compliance with COPPA are also with VCDPA. Our letter also points out that raising the age of “children” to include teenagers would seriously impede Virginia teens ability to access the countless educational and informational resources on the Internet.

We are still early in the year and anticipate privacy and data security bills to be introduced and considered in many states. AAF will continue to work with our local members and allied associations to respond as appropriate in as timely a manner as possible.

Congress/Administration Look to Federal Privacy Laws

AAF is supportive of a federal privacy and data security law and is working with our partners in Privacy for America to encourage Congress to pass such a law. We believe consumers in every state are deserving of appropriate privacy protections and a certainty of standards nationwide will benefit not only consumers, but businesses and the economy as well. Unfortunately, much of the rhetoric surrounding the issue tends to demonize the industry and the use of data. AAF and our industry partners will work to ensure any new laws and regulations also recognize and encourage the many benefits of responsibly used data to consumers, businesses and the economy.

Despite the well-publicized disagreements between Republicans and Democrats on Capitol Hill, privacy and data security is an issue many members of both parties would like to address. Last summer, the House Energy and Commerce Committee for the first time passed a bi-partisan comprehensive privacy bill. While AAF believes the measure has some serious flaws, it shows the desire of lawmakers to act.

Momentum is growing for action in other parts of the Capitol as well. President Joe Biden recently called on Congress to come together “to hold Big Tech accountable.” Unfortunately, he called for what could be overly strict limitations on the use of personal data. Some members of his administration recognize the need for a national standard. Alan Davidson, Assistant Secretary of Commerce for Communications Information was recently quoted as saying, “Though some states have taken the lead on privacy protections, far too many in America lack baseline protections for their privacy and personal information. A national standard is a much better way to operate…Privacy rights shouldn’t change when you cross state lines.”

A recent report said that Senate Majority Leader Chuck Schumer (D-NY) is tentatively planning a June vote on legislation to protect children online. Last summer, AAF communicated with Senate Commerce Committee leaders expressing our support for a national, preemptive, comprehensive privacy law that strengthens protections for kids and teens within a broader privacy framework for all Americans.

Congressional Committee Members Announced

One of the first orders of business for a new Congress is to select members of Congressional Committees. While there is much continuity from Congress to Congress, retirements, new members and a change in party control lead to changes, and new members on the committees of interest to educate about the value of the advertising industry.

The new Chair of the House Ways and Means Committee, which has jurisdiction concerning tax matters, is Rep. Jason Smith (R-MO). Rep. Richard Neal (D-MA), the former Chair, is now the Ranking Minority Member. A full list committee members can be found here.

Rep. Cathy McMorris Rodgers (R-WA) is the new Chair of the House Energy and Commerce Committee which has jurisdiction with most non-tax advertising issues, including privacy and data security. The former Chair, Rep. Frank Pallone (D-NJ), is now the Ranking Minority Member. A full list of committee members can be found here.

As of this writing, membership of Senate Committees have not been finalized.

AAF Advertising Day on the Hill 2023

AAF’s Advertising Day on the Hill will be held in Washington, DC, Thursday, March 23, and registration is open for this important and exciting event.

AAF is effective as a grassroots organization because of the active participation of our local members in the many policy issues that affect advertising—such as those discussed above. Advertising Day on the Hill brings our grassroots together in Washington, DC, to learn about issues from policy experts, and then take the message to Capitol Hill to educate their Senators and Representatives about our views, and the importance of advertising to the economy of their states and districts. Given AAF’s charge to protect and defend advertising, Advertising Day on the Hill is among our most important events.

The program is coming together. Already confirmed speakers include,

• Mac Campbell, Capitol Counsel
• Mary Engle, BBB National Programs
• Lou Mastia, Digital Advertising Alliance
• Michael Signorelli, Venable

More speakers will be announced soon.

A room block has been set aside for attendees. We urge you to register now for AAF’s Advertising Day on the Hill.

Government Report

Ad Deductibility a Revenue Option

The Congressional Budget Office has released its periodic list of options for reducing the federal deficit. As in the past, one option is reductions in the ability of businesses to deduct 100% of advertising expenditures in the current year. Members of Congress frequently refer to the list when looking for new sources of revenue.

The CBO estimates that requiring half of advertising expenses to be amortized over five years would reduce the deficit by $62.4 billion from 2023-2027 and $76.3 billion from 2023-2032. Extending the amortization period to 10 years would increase the 2023-2027 estimates to $95.4 billion and $154.2 billion for 2023-2032.

Although never adopted by lawmakers, similar estimates have been an option in the CBO report for years. They were most recently seriously considered prior to the 2017 tax reform package enactment.

AAF is a founding member of The Advertising Coalition, a group of associations and corporations dedicated to insuring Congress does not enact either of these options. Our goal is to maintain advertising’s current status as a normal and necessary business expense fully deductible in the current year.

An effective strategy of the AAF and Advertising Coalition historically has been to match members of our grass roots network in meetings with members of the House and Senate tax writing committees from their respective districts. Doing so provides an opportunity for discussion on the importance of advertising to the local and national economy.

Two examples of recent meetings include with Rep. Dan Kildee (D-MI) attended by Dave Perry, President of AAF-Greater Flint and another with Rep. Lloyd Smucker (R-PA) attended by John Mulder, past District 2 Governor.

Limiting Data Use Will Harm Consumers and Content Providers

A recently released review of available research by economists with NERA Economic Consulting finds limiting online advertising’s access to data about audience interests and demographics substantially reduces revenue to online content providers by 50 to 70 percent. Such limits will disproportionately affect small publishers and advertisers and have the unintended effect of strengthening the competitive advantage of large platforms. Revenue losses will threaten the foundation of free online services worth $30,000 per year to the typical consumer, the review found.

The study was sponsored by the Digital Advertising Alliance and Privacy for America, two groups in which AAF plays an active role.

AAF will continue to work with Privacy for America, as well as many association and corporate partners to encourage Congress to pass a national data security law that protects consumers and allows companies to continue to responsibly use data to deliver relevant advertising.

Despite predictions of gridlock due to the divided Congress after midterm elections, there is a distinct possibility data security law could be enacted. Lawmakers on both sides of the aisle are eager to show Congress can still get things done. Privacy and data security is an issue with broad agreement in both parties and could be an area where Democrats and Republicans can work together. AAF will work with both sides to help craft a law that works for all.

State Privacy Update

In the absence of federal privacy legislation, many states have passed or considered their own measures. AAF opposes statewide privacy laws as we believe a patchwork of inconsistent and sometimes contradictory laws can make it difficult if not impossible for businesses to comply–especially smaller ones with fewer resources. Differing standards can also create consumer confusion.

While we oppose the proposed laws, we do provide comments to legislators and regulators in an effort to ensure disparate measures align with each other as much as possible. Most recently, we submitted comments in California and Oregon. Throughout 2022, we commented on proposed laws in Washington, Alaska, Maryland, New York, Massachusetts, Nebraska, Florida, Louisiana and Pennsylvania. We are especially happy that on the majority of these comments we were joined by local AAF clubs and/or districts, demonstrating to state officials these issues are not just the concern of “big tech” and large corporations, but would also negatively impact small and local businesses in their own states.

AAF expects many states to look at privacy laws in the coming year and will continue our strategy of opposing and commenting while continuing to push for a national privacy and data security law that will work for businesses while protecting all Americans regardless of their state of residence.

AAF Advertising Day on the Hill 2023

Registration is open for AAF’s Advertising Day on the Hill to be held in Washington, DC, March 23, 2023. AAF is the advertising industry’s premiere grassroots organization and Advertising Day on the Hill is the day when that grassroots gathers in Washington to learn about the issues and educate lawmakers about the importance of advertising to the economy and their constituents.

More information will be coming in the new year, but it is not too soon to register to attend Advertising Day on the Hill and make your voice heard.

A hotel block has been secured for attendees at The Hamilton, just two blocks from the AAF national office. The link will be available in January.

Digital Advertising Alliance Self-Regulatory Program Going Strong into 2023

The American Advertising Federation is one of the long-standing Board members of the Digital Advertising Alliance and its “AdChoices” program. DAA Principles have been providing a data ethics layer for interest-based advertising since 2010—and has been modified numerous times to keep pace with advertising innovations and marketplace practices. Such flexibility and nimbleness serves us well, particularly as states and the federal government enter the space. Successful self-regulation, such as the DAA’s program, which has been lauded by key stakeholders in government and media, could be viewed as a bright line and/or a potential safe harbor.

Continuing in this role to lead the way for cross-industry responsible data collection and use, in 2023, DAA is taking the program in meaningful places at the heart of consumer-brand engagement.

CMP CoMPlement—For consumer transparency and choice, DAA is announcing a new initiative to work with consent management platforms or providers (CMPs). The CMP CoMPlement project consists of interface guidance and an integration specification that CMPs can use to bridge consumer choices between the DAA and their own respective offerings. This work leverages the already widely recognized AdChoices Icon as a gateway for privacy information and controls by complementing it with a DAA Recognized CMP and provides a path for consumers to access the kind of choices the responsible industry has made available for over a decade. If your clients are using CMPs, please direct those CMPs to contact the DAA’s Jamie Monaco at cmp@aboutads.info to explore how CMP CoMPlement can elevate “AdChoices” access and functionality.

Political Ad Icon Serving & Ad Database—During the most recent US midterm elections, DAA estimates that the Political Ads Icon was served at a rate of approximately 2 billion per month nationwide. This is a manifestation of our commitment to transparency and responsibility in political advertising based on a promise the industry made to Congress and other stakeholders in 2018.

To make keeping this promise even easier going forward, demand-side platforms, political advertisers (and their agency partners) and publishers alike will want to pay attention to the services offered through the updated DAA Political Ad platform which features a self-serve icon-serving platform that participants can use to place transparency information atop their political ads—much as our blue AdChoices icon does for privacy information. DAA also offers an ad database to store ad creatives for up to five years—that can serve as a registry for election requirements. Both the icon serving and ad database have an API for integration. To explore Political Ad icon certification and platform participation, visit: aboutpoliticalads.org/advertiser.

Addressable Media Identifiers—With the impending changes in existing identifiers, the DAA has announced the launch of a certification process for providers of Addressable Media Identifiers (AMIs). AMIs are used to enable relevant advertising, optimized outcomes, measurement tools, and other important functionality with new privacy safeguards for the ad-supported digital content and services enjoyed by millions of consumers worldwide. Companies that have issued, plan to issue, or use AMIs can certify their compliance with the Policy Framework for Addressable Media Identifiers released by the advertising industry earlier this year. The AMI Policy Framework is designed to ensure users and providers of AMIs continue to safeguard consumer privacy by delineating both explicitly permitted data uses and prohibited uses of data. AMI’s also provide meaningful choices to consumers, publishers, agencies, and advertisers, and they maintain the critical functionality needed to provide ad-supported content and services in the digital ecosystem.

The Policy Framework for Addressable Media Identifiers sets limitations on permitted uses – such as security, analytics, legal compliance, and control-based advertising – while prohibiting the use of key sensitive health, financial, biometric, and financial data with the AMI. In addition, the Framework enables advertisers and other stakeholders to select audiences linked to AMIs that are made up exclusively of consumers who have provided “opt-in” consent to receive online behavioral advertising, as such technologies mature. This flexible approach allows advertisers to meet the widely varying legal and regulatory requirements for different jurisdictions, as well as adopting custom standards that meet their business needs.

The DAA’s certification process is strongly supported by the broad range of advertising trade associations on the DAA board, including the AA, 4A’s, ANA, Interactive Advertising Bureau, and Network Advertising Initiative. The Policy Framework for Addressable Media Identifiers was released by the Partnership for Responsible Addressable Media in February 2022, prior to it transitioning the implementation of ongoing AMI certification and oversight to the DAA.

DAA is asking brands and publishers—and their agency partners— to include DAA-certified AMIs in their RFPS, policies and Contracts. To initiate the AMI certification process, visit: digitaladvertisingalliance.org/ami

There will be other initiatives AAF will share on DAA Principles in the New Year—particularly as we approach our 2023 AAF Hill Day. The developments above and new ones AAF helps DAA with, related to connected devices as well as others, are always aimed at keeping the industry on the right of the consumer, helping add invaluable substance to meetings with key government stakeholders, showcasing the commitment to privacy our industry has long championed through effective self-regulation. Stay tuned!

Government Report

ftc moves looks at privacy rulemaking

On September 8, the Federal Trade Commission conducted an online “Commercial Surveillance and Data Security Rulemaking Forum” as a follow-up to the release of the Advance Notice of Public Rulemaking on the same subject.

AAF Executive Vice President-Government Affairs Clark Rector spoke at the Forum. In his comments he noted AAF supports the adoption of a national privacy law but believes Congress is the appropriate body to enact that law, noting that AAF has and is urging Congress to do so. He took exception to the tone of the ANPR pointing out it failed to recognize the many benefits of the responsible use of data and data-driven advertising.

MediaPost published an op-ed by Rector explaining AAF’s views on the matter.

AAF objects to the pejorative term “commercial surveillance” as it casts an unfair, negative light on a practice that when appropriately done is beneficial to and accepted by businesses and most consumers.

The AAF has also joined a letter to the Commission requesting an extension of the public comment period on the ANPR from October 21 to December 20, 2022.

california enacts problematic child online protection law

California Governor Gavin Newsom has signed into law the Age-Appropriate Design Code Act intended to protect children online. While AAF supports protecting children online, we believe the new law is seriously flawed and AAF signed a letter urging the Governor to veto it.

Among other flaws, the new law defines a child as anyone under the age of eighteen. The federal Children’s Online Privacy Protection Rule defines a child as being under the age of 13 and the California Consumer Privacy Act and California Privacy Rights Act recognizes categories of under thirteen, thirteen to fifteen and sixteen and older. The bills overly broad standards would include the vast majority of websites of even minimal interest to anyone under the age of 18 and its age-verification requirements would greatly degrade the online experience for adults as well as children.

protecting the deductibility of advertising

Perhaps the most important government affairs issue for AAF members is preserving advertising’s federal tax status as a normal and necessary business expense fully deductible in the current year. AAF is a founding member of The Advertising Coalition, a group of associations and companies that work together on the issue. One of our strategies is to arrange grassroots meetings between House and Senate members of the congressional tax writing committees and their constituents from the advertising industry. Many AAF club members from across the country have attended these meetings. One of the most recent was with Representative Dan Kildee, D-Mich., a member of the House Ways and Means Committee. Dave Perry, President of AAF Greater Flint reports:

When I got the call from Clark Rector at AAF to help mobilize a grassroots meeting with our local Congressman Dan Kildee in my town of Flint, Michigan, I was excited to help make that happen. The group that was assembled for this meeting was a great representation of the local advertising landscape; TV, radio, agency and several others were present to give a face to the impact that advertising has in this community. The meeting went well, and we covered a lot of ground supported by a lot of facts and figures, on why the deductibility of advertising expenses is vital to the sustainability of this industry and why Congressman Kildee, a member of the House Ways and Means Committee, needs to be on our side when discussion of this subject comes up on the Hill. I was honored to be called to duty on behalf of the AAF and the advertising industry and feel that this is the heart of what the AAF does for its membership and the reason involvement is so vital.

aaf encourages advertising industry to vote

The American Advertising Federation, along with many of our allied industry partners has joined forces with Voting Maven to increase voter participation within the Advertising & Media industry. The goal is to empower all advertising professionals with the information resources they need to exercise their right to vote.

Complete information can be found at votingmaven.org (Media & Advertising Voters Engaging Now), a non-partisan mid-term voting information destination for the industry, by the industry. There a voter can find everything she or he needs to know, including polling location, early voting rules, ballot information, and voter registration status.

daa provides political ads disclosure solution

AAF is a participant in The Digital Advertising Alliance (DAA), a consortium of leading national advertising and marketing trade groups that together deliver effective, self-regulatory solutions to online consumer issues. The DAA has provided this update for AAF members about their political advertising tools.

political ads and voter transparency: how to ensure political clients deliver necessary campaign disclosures unobtrusively in digital and mobile ads

With the primary season over, and the mid-term general election now upon us, it’s a good time to revisit just how to deliver campaign disclosures with every mobile and digital political ad our member agencies deliver on behalf of political clients.

The Digital Advertising Alliance (DAA) – in which AAF is a founder – has simplified its Political Ads Program in such a way that it’s easy for agencies to leverage on behalf of their clients.

When DAA first launched the Application of Principles of Transparency and Accountability to Political Advertising (pdf) and an accompanying voter education site in 2018, the focus was on having companies build mechanisms into their own platforms to help their political advertisers with compliance, for example delivering the Political Ad icon and required disclosures in ads.

The DAA Political Ads Principles were developed in a cross-industry fashion to be responsive to concerns raised by the US Congress and other elected stakeholders about the transparency in digital political advertisements. Several US states and the national elections regulators in Canada have supported or adopted the Principles in various ways. This demonstrates the ability of the responsible digital advertising industry to be responsive to and effective at delivering on its promises. As the Wall Street Journal reported when we launched, “…marketers and advertising platforms have a vested interest in cleaning up the digital ad ecosystem and making it more transparent, particularly as brand-safety concerns continue to crop up.”

According to the DAA Principles, the icon and optional “Political Ad” wording (also available in Spanish) on the marker should link to disclosures that include:

• Name of the political advertiser;
• Phone number, address, website, or alternative and reliable contact information for the advertiser;
• Link to a government database of contributions and expenditures for the advertiser, if applicable;
• Name(s) of the advertiser’s CEO, executive committee, board of directors or treasurer,
• Any disclaimers required by state or federal law, if the ad itself is too small to display them (as permitted by applicable law); and
• Other information required by applicable federal or state law for such notices.

In consultation with several companies and in cooperation with DAA’s global partner, Digital Advertising Alliance of Canada – which also has a version of Political Ads Principles north of the border, DAA has undertaken three program enhancements to make adherence to the Principles easier for political advertisers, with the active support of their agencies:

• A self-service platform (with onboarding and training support), where each political advertiser (or their agency) can enable icon and disclosure delivery tagged to each and every political ad by the advertiser, the campaign, and the creative they handle.
• An application programming interface (API) that enables the same real-time disclosures, can integrate with agencies’ own programmatic offerings.
• A public Political Ad registry service – available both to self-service and API users – which many demand-side and other ad tech platforms might choose to use, complement, or integrate.  (Several states now require political advertisers in a respective state to maintain a public-facing registry or database of political ads associated with a candidate.)

A recent webinar DAA organized with its legal counsel, MediaMath, and Campaigns & Elections magazine showcases these enhancements, their functionality and their benefits to agencies. A recording is available here.  If you’d like to get on board or extend your use of the Political Ads program, contact DAA’s Chet Dalzell directly chet@aboutads.info or get started here.2023 advertising day on the hillPreparations are underway for the AAF’s next Advocacy and Action: Advertising Day on the Hill Thursday, March 23, 2023, in Washington, DC.

As a vivid demonstration of our grassroots in action, the Advertising Day on the Hill is one of the most important days on the AAF calendar. In the morning, participants are briefed on the issues facing the advertising industry. The afternoon is spent in meetings with lawmakers and their staffs educating them about the issues and the importance of advertising to the U.S. economy.

Few things make as a profound impact on elected officials as constituents passionate enough about their industry to travel to our nation’s Capital to make their voices heard.
Registration opens soon. For now, mark your calendars for March 23, 2023, and start making plans to join us in Washington, DC for AAF’s Advocacy and Action: Advertising Day on the Hill to make your voice heard.

Government Report

congress works on privacy

July has been a busy month on Capitol Hill for privacy issues.

On July 20, the House Energy and Commerce Committee sent the American Data Privacy and Protection Act to the full House of Representatives for consideration. If enacted, the measure would eliminate most interest-based advertising by prohibiting companies from collecting or processing data about web user’s online activity across sites and over time for ad purposes.

The AAF supports a national, preemptive, comprehensive privacy law that represents a workable national privacy standard that works for consumers and businesses alike. We expressed our concerns and offered suggestions to improve this bill in substantive comments (here and here) to Committee leadership.

While the measure passed by a 52-3 vote, many members of the Committee expressed concern with some provisions of the bill and indicated their votes in favor were in the interest of continuing the dialogue on the issue.

Between the upcoming summer recess and elections in the fall, there are relatively few legislative days remaining this Congressional session. It is uncertain whether the measure will be brought before the full House, and even more unlikely to be heard in the Senate. AAF and our partners in Privacy for America will continue to educate lawmakers about the many benefits of the responsible use of data and continue to advocate for comprehensive privacy legislation that works for consumers and businesses.

Meanwhile, on the other side of the Hill, the Senate Commerce Committee met July 27, and advanced two pieces of children’s online privacy legislation. The Kid’s Online Safety Act was introduced by Senators Richard Blumenthal, D-CT and Marsha Blackburn, R-TN. Senators Ed Markey, D-MA and Bill Cassidy, R-LA introduced the Children’s and Teens Online Privacy Protection Act.

AAF was in contact with the Committee to express our concern that both pieces of legislation are drafted so broadly that almost any online service enjoyed by adults would also be impacted. We reiterated out support for national comprehensive privacy legislation that improves privacy for all Americans, including kids and teens. Prospects that the bills will be considered this year by the full Senate appear to be very slim.

senate bill would allow marijuana advertising

A bill introduced by Senator Ben Ray Lujan, D-NM would permit ads for cannabis products on radio and TV in any state tribe or territory where it is legal with no federal penalties. The bill would prevent the Federal Communications Commission from denying or penalizing broadcast stations that allow marijuana ads as long as they meet the legal criteria and the broadcasters secure “reliable evidence” that at least 70% of the audience is over 21. AAF has a long history of defending truthful advertising for legal products directed to appropriate audiences.

advertising day on the hill to return in 2023

The AAF is pleased to announce that Advocacy and Action: Advertising Day on the Hill will return as an in-person event Thursday, March 23, 2023, in Washington, DC. Because of coronavirus and Hill security concerns, the 2022 Day on the Hill was conducted virtually.

As a vivid demonstration of our grassroots in action, the Advertising Day on the Hill is one of the most important days on the AAF calendar. In the morning participants are briefed on the issues facing the advertising industry. The afternoon is spent in meetings with lawmakers and their staffs educating them about the issues and the importance of advertising to the U.S. economy.

Few things make as a profound impact on elected officials as constituents passionate enough about their industry to travel to our nation’s Capital to make their voices heard.

More information will be coming soon, but for now mark your calendars for March 23, 2023, and start making plans to join us in Washington, DC for AAF’s Advocacy and Action: Advertising Day on the Hill.

Government Report

privacy—the focus of federal and state lawmakers

Privacy issues continue to draw the attention of lawmakers at both the state and federal level.

Representatives Frank Pallone, Jr., D-NJ and Cathy McMorris Rodgers, R-WA and Senator Roger Wicker, R-MS released a discussion draft of a comprehensive national data privacy and data security framework. This is significant as these are three of the four major players in Congress with jurisdiction over privacy issues. Pallone is Chair of the House Energy and Commerce Committee and McMorris Rodgers is the senior Republican. Senator Wicker is senior Republican on the Senate Commerce Committee. Only Senate Commerce Committee Chair Maria Cantwell, D-WA is missing from the draft.

The Energy and Commerce Committee conducted a June 14 hearing to examine the legislation. While AAF is supportive of a national privacy law and is encouraged to see Congressional attention being paid to the issue, we are concerned that this proposal is significantly flawed. We are in agreement with the Privacy for America statement that “by requiring restrictive opt-in policies for non-sensitive data, draft legislation released this month falls short in terms of preserving responsible data use that allows businesses of all sizes to advertise to consumers products and services they might be interested in, the lifeblood of growth in the American economy.”

AAF Executive Vice President-Government Affairs Clark Rector has participated in industry meetings with Hill staff to express concerns about the proposed law. AAF will continue to work with federal lawmakers and our allies in Privacy for America in support of federal privacy legislation that allows the responsible use of data to benefit consumers, businesses and the American economy.

While Congress debates, many state legislatures are looking at enacting privacy laws. As a supporter of federal legislation, AAF opposes state privacy proposals believing that a patchwork of inconsistent state laws would be detrimental to consumers and businesses. However, we have often provided comments to legislators in the interest of harmonizing the state proposals as much as possible.

We were recently joined by AAF-Baton Rouge, AAF-New Orleans, AAF-Northeast Louisiana, AAF Shreveport-Bossier, AAF District 7 and AAF District 10 on a letter to lawmakers about privacy legislation in the Louisiana legislature. The legislative session ended on June 6.

We were joined on a similar letter regarding privacy legislation in the Pennsylvania General Assembly lawmakers by AAF-Greater Lehigh Valley, AAF-Pittsburgh, Ad 2 Pittsburgh and AAF District 2. The measure is not currently scheduled for action.

AAF has provided comments to the Oregon Consumer Privacy Task Force which is working to draft a proposed comprehensive privacy law in conjunction with the Oregon Attorney General’s office draft in Oregon. Timing and prospects for the project remain uncertain.

On May 4, AAF Executive Vice President-Government Affairs Clark Rector testified virtually before the California Privacy Protection Agency urging the agency to keep in mind the limited resources of smaller businesses and their good faith ability to comply with any proposed regulations implementing the California Consumer Privacy Act of 2018 and the California Privacy Rights Act of 2020.

The Agency has recently released proposed regulations. Unfortunately, an initial review reveals that the proposed regulations go beyond or directly contradict what the law requires. AAF will join in providing a response to the Agency.

ftc commissioner confirmed

In May, the Senate confirmed law professor Alvaro Bedoya to serve as the fifth Commissioner on the Federal Trade Commission. The confirmation breaks a months long partisan deadlock and gives Democrats a three to two majority of Commissioners. Bedoya is the founder of Georgetown Law Center on Privacy and Technology and is expected to be an ally of FTC Chair Lina Khan who has signaled her desire to bring more aggressive cases against tech companies and perhaps pursue new regulations governing privacy and competition in the digital economy.

ftc looking to update industry guides

The FTC has asked for public comment on Updated Guides Concerning the Use of Endorsements and Testimonials in Advertising. The Commission is particularly concerned about social media platforms and inadequate disclosure tools regarding fake or manipulated reviews and the compensation of influencers.

The Agency has also issued a request for information on a comprehensive update of guidance regarding digital advertising. It’s initial publication .com Disclosures, How to Make Effective Disclosures in Digital Advertising was published in 2000 and last updated in 2013. The Commission has stated “it’s time for a start-to-finish reboot, given the major changes in advertising tactics and techniques that marketers use.”

Government Report

ad tax removed from kentucky legislation

Soon after AAF alerted its Kentucky members to an ad tax included in legislation introduced by State Representative Jason Petrie (R-Elkton) Chair of the House Appropriations and Revenue Committee, the provision was removed from the bill. As introduced, HB 8 would have expanded Kentucky’s 6% gross receipts sales and use tax base to 39 new services, including advertising and graphic design services.

After undergoing multiple changes during negotiations between the Kentucky House and Senate, the measure was passed and sent to Governor Andy Beshear (D) without the tax on advertising. Unfortunately, the bill does include a tax on marketing services and photography and photo finishing services. At this writing it is uncertain if the Governor will sign the measure into law. If vetoed the Republican-controlled legislature has a sizeable majority, capable of an override.

state privacy update

Six AAF Florida advertising clubs signed on to comments opposing restricting privacy bills being considered in the Florida Senate and House of Representatives. The legislature adjourned March 11, without enacting either bill.

All three AAF Washington advertising clubs joined in a letter to lawmakers urging them to not pass flawed privacy measures being considered in the state legislature. As in Florida, the legislature adjourned without passing the bills.

AAF filed comments on pending privacy legislation in Alaska. Utah Governor Spencer Cox (R) has signed the Utah Consumer Privacy Act into law. While AAF does not support state privacy laws, we are pleased the Utah law is a relatively business and consumer friendly measure similar to the law previously passed in Virginia.

congress urged to act on privacy

The Washington Post has urged Congress to overcome their differences and enact a comprehensive data privacy law. AAF, working with the Privacy for America Coalition has long advocated for a strong national privacy law. In supporting that position, the paper’s editorial board suggested ways to find common ground on the two most contentious issues, federal preemption and private rights of action:

“The whole point of federal legislation is to avoid an unworkable patchwork of conflicting mandates; as long as a nationwide law is sufficiently robust, it should preempt state laws that are inconsistent, while still allowing local strictures that fill gaps to stand. As for the right to sue, individuals should be empowered to seek redress—but only under certain circumstances, including financial loss or a defined set of egregious violations of privacy.”

Whether this push compels Congress to act remains to be seen.

advertising day on the hill (and in state capitols)

March 17, AAF conducted a successful virtual Advertising Day on the Hill. More than 70 people registered for the event which featured an array of impressive speakers.

Serena Viswanathan, associate director, Division of Advertising Practices at the Federal Trade Commission, discussed the agency’s advertising regulation priorities and shared an overview of recent representative deceptive advertising cases. Shannon Smith, Counsel to the U.S. Senate Committee on Commerce, Science and Transportation discussed the prospects for a new federal law addressing privacy and data security.

Participants also learned about issues confronting advertising from some of AAF’s coalition partners. Lou Mastria, executive director of the Digital Advertising Alliance and Mike Signorelli a partner at Venable and Counsel to Privacy for America discussed federal and state privacy issues. Mac Campbell, a partner at Capitol Counsel and counsel to The Advertising Coalition briefed the attendees on federal attempts to limit the full federal tax deductibility of advertising expenses.

Finally, Arielle Garcia, chief privacy officer for UM Worldwide, and a member of AAF’s Advertising Hall of Achievement, talked about the importance of robust privacy practices from a business perspective.

We are grateful to our sponsors, TikTok, Meta and the Digital Advertising Alliance for their support of this important program. While the virtual Advertising Day on the Hill was a great success, we are hopeful we will return to Washington, D.C., and demonstrate the power of AAF grassroots by including in-person meetings with senators, representatives, and their staffs.

In addition to AAF’s Advertising Day on the Hill, AAF advertising clubs in Texas, Nebraska and Iowa held events in their state capitols in March. Here are reports from those events.

texas day at the capitol march 2, 2022

Helena Abbing, AAF Austin Government Co-Chair Reporting

Goal: Educate membership and unite Texas AAF chapters in our grassroots mission.
As part of our strategy to engage members for our March event, AAF Austin Government co-chair Lucas Lee led the development of a Texas Lege 101 deck. This is a top-level explanation of how our State Legislature meets bi-annually and how bills are proposed. AAF Austin Government Co-chair Helena Abbing worked with the Texas team of volunteers alongside District 10 and national leadership to develop talking points and a leave-behind for Texas legislators after our meetings.

We kicked off the event with an overview of the AAF Government Relations mission by D10 Governor Stephanie Price and AAF President and CEO Steve Pacheco.

With help from our Houston AAF President Ray Shilens, we pre-recorded sessions covering issues of Taxation and Privacy with Clark Rector, executive vice president of Government Affairs for AAF National and Michael Signorelli, partner at Venable, LLP. Having a virtual event allowed for participation of chapters outside of Austin.

Our team had pre-set appointments with more than 20 key legislators/staffers, and we connected with them in breakout rooms after the educational program. We covered our talking points: to serve as a resource, educate them on our economic contributions, and show we are a powerful voice that when unified, cannot be ignored.

iowa ad day at the capitol

Tom Woody, AAF Des Moines Government Relations Director Reporting

Last month, members of AAF Des Moines hosted their 13th annual Ad Day at the Capitol, a legislative day where members of the advertising community connect with state senators and representatives. AAF-Des Moines traditionally holds this event annually, but due to safety concerns and changes in operations at the Iowa State House as a result of the COVID-19 pandemic, the club had not been able to host the event in the last two years. Many of the representatives noted that they were grateful to see groups like the AAF back in the building to discuss policy and issues.

Digital advertising and data privacy were a reoccurring theme in discussions with many of the policy makers and aides who shared that it has been a big point of interest and concerns that have been raised by constituents. This event was important and timely as a digital advertising tax had been discussed in the legislative session. AAF Des Moines, AAF National and other industry partners were successful in combating that proposal.

aaf nebraska day under the dome

Cassi Warren, AAF Nebraska 2nd Vice President Reporting

March 29, 2022, was AAF Nebraska’s inaugural Ad Day Under the Dome. The Legislative Committee focused efforts to get appointments with senators in the Revenue and Business & Labor Committees. The AAF Nebraska legislative chair, 2nd vice president and four AAF Nebraska members took to the halls of the Nebraska State Capitol meeting with 16 Nebraska state legislators. The AAF Nebraska shared updated data on the economic impacts the advertising industry brings to Nebraska’s economy (both in sales revenue and jobs) and offered AAF Nebraska leadership as a resource to our Nebraska lawmakers.

The goal was set and executed with our grassroots effort to build personal connections with these senators so they will keep the advertising community in the forefront when writing and proposing legislation.

Government Report

president targets advertising in state of the union

In his State of the Union address March 1, President Joe Biden took aim at social media companies and advertising to children. According to the President,

We must hold social media platforms accountable for the national experiment they’re conducting on our children for profit. It’s time to strengthen privacy protections, ban targeted advertising to children, demand tech companies stop collecting personal data on our children.

The AAF agrees that children are deserving of protections online. The comprehensive privacy framework put forward by the AAF supported Privacy for America specifically addresses protecting children.

Special Protections for Individuals Over 12 and Under 16 (Tweens). The framework includes a robust set of safeguards for data collected from tweens, an age group that needs protection but is actively engaged online and not subject to constant parental oversight. Specifically, the framework would prohibit companies from transferring tween data to third parties when they have actual knowledge of age. It also would ban payment to tweens for personal data, except under a contract to which a parent or legal guardian is a party. Finally, companies would be required to implement data eraser requirements allowing individuals to delete data posted online when they were tweens.

We look forward to working with the Administration and Congress to enact comprehensive privacy legislation that protects all consumers and allows them and businesses to reap the many benefits of the responsible use of data.

ad tax introduced in kentucky

Kentucky State Representative Jason Petrie (R-Elkton) Chair of the House Appropriations and Revenue Committee introduced HB 8, which would expand Kentucky’s 6% gross receipts sales and use tax base to 39 new services, including advertising and graphic design services.

Prospects for the legislation are uncertain, but since the sponsor is chairman of the revenue raising committee, it could move quickly. AAF has alerted our Kentucky members to ask them to lawmakers and contact urge opposition to any effort to tax advertising.

state privacy act

AAF continues to file comments regarding state privacy proposals advocating for a national privacy standard and offering suggestions for those state bills to better align with existing laws in other states. We often have short notice to file, but when time allows, we are joined on the comments by ad clubs to emphasize to lawmakers that the issues are of concern to both the local and national advertising industry.

Recent letters have been submitted in New York, Florida, Massachusetts, and Nebraska. We continue to monitor proposals in other states including Arizona, Connecticut, Iowa, and Utah and will provide input to lawmakers as necessary.

iowa tax threat averted

The House version of an omnibus tax bill in Iowa caused a great deal of unease in the industry regarding its possible targeting of advertising for taxation. At issue was undefined language in the bill that would have expanded the sales tax base to include “cloud computing,” “web hosting” and “digital automated services.” The concern was these terms were vague enough they could be interpreted to include digital and other advertising.

AAF Des Moines Government Relations Director Tom Woody was among the industry leaders who communicated concerns about the issue with state lawmakers. In the end, the Senate version of the bill, without the troublesome language, replace the House version and was sent to the Governor.

advertising day on the hill

Registration is open for the American Advertising Federation’s Virtual Advertising Day on the Hill, Thursday, March 17 from Noon to 3:00 pm Eastern Time. This jam-packed event will tell you everything you need to know about the important issues confronting advertising, including taxes and privacy, and how to communicate your concerns to your Senators and Representatives.

In addition to experts on the issues, confirmed speakers include Shannon Smith, Counsel to the U.S. Senate Committee on Commerce, Science and Transportation and Serena Viswanathan, Associate Director, Division of Advertising Practices, Federal Trade Commission.

Even in a virtual world, it is important to be knowledgeable about the issues confronting our industry and be able to educate lawmakers about the importance of advertising to consumers, businesses and the economy.

Register today and join us for this important event, AAF Advertising Day on the Hill.

Government Report

lawmakers target interest-based advertising

Representatives Anna Eshoo, D-CA and Jan Schakowsky, D-Il and Senator Cory Booker, D-NJ have introduced the Banning Surveillance Advertising Act which would prohibit companies from targeting ads to consumers except for broad, location-based targeting and contextual ads.

The AAF opposes this legislation. We support limitations on the use of sensitive data, such as medical and financial information, in targeting interest-based advertising. However, this bill goes much too far. Responsible interest-based data driven advertising helps drive the digital economy. We believe businesses and consumers both benefit when those consumers are served ads for products and services that they are more likely to be interested in. AAF member Google recently published a blog post outlining their opposition to this and other anti-tech bill.

No action is currently scheduled on the legislation.

In a related action, Accountable Tech has filed a petition for proposed rule making to the Federal Trade Commission asking it to prohibit surveillance advertising claiming, wrongly AAF believes, that it is an “unfair method of competition.”

The AAF-supported Privacy for America has submitted comments to the Commission in opposition to the petition explaining that

A ban on data-driven advertising practices would not be a good use of the Commission’s resources and would cause immense disruption and harm to the online economy, deny consumers access to the vital ad-supported services on which they rely, and potentially lead to more centralized marketplaces thanks to an increase in the cost of starting new businesses and attracting new customers.

The Commission has not yet indicated how or if it will act on the petition.

state privacy update

As state legislatures reconvene for their 2022 sessions, we are starting to see the introduction of privacy bills in many jurisdictions. AAF, through our affiliation with Privacy for America, supports the passage of federal privacy legislation. We generally oppose state privacy bills, not only because they tend to be overly onerous, but because we believe that a single privacy standard nationwide would better serve consumers, businesses and regulators tasked with enforcing the law. Despite our opposition, we often file comments with state legislators suggesting ways to better align their proposals to existing laws in other states.

Already this year AAF, our national allies as well as AAF Seattle and AAF Spokane submitted comments on legislation being considered in Washington. Together with AAF Baltimore, we have commented on a measure before the Maryland legislature. We have also provided our views to lawmakers in reaction to a bill in Alaska.

Proposals have also surfaced in Delaware, Florida, Indiana, Kentucky, Mississippi and Pennsylvania. Not all of these will receive serious consideration. AAF, and where possible our local clubs, will provide comments where necessary and appropriate.

Supporting our position that a national privacy standard is necessary, the Information Technology & Innovation Foundation recently release a study showing the potential high cost of a patchwork of inconsistent state privacy laws. The study estimates out-of-state costs of between $98 billion and $112 billion annually with $20-23 billion falling on small businesses.

aaf day on the hill going virtual

As much as we were looking forward to bringing together AAF’s grassroots network in Washington, DC for AAF’s Advertising Day on the Hill on March 16-17, 2022, we have made the difficult decision to transition the event to online only on March 17. Unfortunately, health concerns surrounding COVID-19 and ongoing security measures on Capitol Hill would prevent us from making a strong in-person showing with elected officials and their staffs.

The virtual Advertising Day on the Hill will still provide attendees a robust briefing on the issues of importance facing the advertising industry as well as information on how to engage with elected representatives and staff online or in their home districts to educate them about the issues important to the advertising industry and the vital role that advertising plays in driving the U.S. economy.

Registration is open and the cost is only $25. Be on the lookout for more details soon about AAF’s Virtual Advertising Day on the Hill.

Please contact AAF EVP of Government Affairs, Clark Rector if you have any questions.

Government Report

build back better would overly empower ftc

The Build Back Better legislation soon to be considered by the U.S. Senate currently includes language to give unprecedented broad civil penalty authority to the Federal Trade Commission. While AAF strongly supports the mission of the FTC, this new authority would go far beyond the powers previously granted by Congress under Section 5 of the Federal Trade Commission Act. In addition to being poor policy, we believe the provisions violate Senate rules of procedure, specifically the Byrd Rule, which prohibits non-budgetary provisions from being included in reconciliation legislation.

The AAF—and many of our ad local clubs—have signed on to a letter urging the Senate to eliminate these provisions from the Build Back Better Act.

maryland digital ad tax regulations released

On December 3, 2021, the Maryland Comptroller published notice of adoption of the digital advertising gross revenues tax regulations. Per the Maryland Administrative Procedure Act, the final adopted regulations went into effect on December 13, 2021.

Despite concerns raised in comments by AAF and others, the final regulations were adopted almost entirely as proposed, with just two minor changes that the Attorney General (AG) of Maryland certified as non-substantive.

While the revenue threshold for tax liability is quite high at $100 million, any business concerned about possible impact is urged to talk with their Maryland tax advisor.

state privacy update

In preparation for next year’s legislative sessions, a number of states have already had bills introduced and/or informational hearings regarding privacy issues.

In Massachusetts the Joint Committee on Advanced Information Technology, the Internet and Cybersecurity conducted a hearing on a number of bills related to data privacy and other matters. AAF submitted comments expressing our concerns about potential legislation.

In Tennessee an Ad Hoc Committee consisting of both Senate and House members conducted late October hearings to look at possible privacy legislation. AAF provided comments to the committee.

The Wyoming Legislature’s Select Committee on Blockchain, Financial Technology and Digital Innovation Technology conducted a recent hearing on proposed privacy legislation that included a number of troubling provisions. AAF submitted comments to the committee members.

AAF has also responded to the California Privacy Protection Agency in response to their Invitation for Preliminary Comments on Proposed Rulemaking Under the California Privacy Rights Act of 2020.

state group declines to share maryland tax

During a recent meeting of the Council of State Governments the group rejected a proposal to include the Maryland Digital Advertising Tax in its list of Shared State Legislation. The SSL has “the goal of sharing innovations in state policy and assisting state leaders on drafting policies that would benefit their communities, CSG Shared State Legislation is curated and disseminated by bipartisan committee of state leaders to identify topics of major interest to the states.” AAF joined comments to the group urging them not to endorse the Digital Ad Tax.

aaf day on the hill returns

The next AAF Advertising Day on the Hill will be March 16-17, 2022 in Washington, DC. Join other advertising professionals from across the country to be briefed on the important issues facing the advertising industry and go to Capitol Hill to educate your elected representatives and their staffs about the issues important to your business and the vital role that advertising plays in driving the U.S. economy.

Registration is open and the cost is only $50. A hotel block is available for attendees.

Many things have changed in Washington, DC since our last event, but one thing that has not changed, and will never change is the importance of making our voice heard on the issues that impact how advertising industry professionals do their jobs.

Sponsorship opportunities are still available. Register now and plan to be in Washington, DC for AAF’s Advocacy and Action: Advertising Day on the Hill. Please contact AAF’s EVP of Government Affairs, Clark Rector if you have any questions.

Government Report

California Attorney General Oversteps on Privacy

California Attorney General Rob Bonta has released a set of frequently asked questions for consumers addressing the California Consumer Privacy Act (CCPA) that AAF believes goes beyond his authority and the intent of the law. We have written to the AG to outline our concerns:

• The FAQs conflict with the approach taken in the California Privacy Rights Act of 2020,
• There was no public process for evaluating or considering the cited tools or particular implementations by the browser referenced in the FAQ,
• The FAQs prejudices subject matters on which the new California Privacy Protection Agency (CPPA) has been directed to promulgate rules.

California Privacy Agency Names Executive Director

The California Privacy Protection Agency has named Ashkan Soltani as its first Executive Director. Soltani has served as a Senior Advisor to the U.S. Chief Technology officer in the White House Office of Science and Technology Policy under the Obama Administration and as the Chief Technologist for the Federal Trade Commission. He has often been critical of industry’s privacy practices.

AAF Comments on Minnesota Legislation

AAF and many of our allied associations have provided comments on privacy legislation introduced by Minnesota State Representative Steve Elkins. The comments urge the lawmaker to align his bill as much as possible with laws already passed in other states, such as Virginia; retain Attorney General enforcement while rejecting a private right of action; and reconsider mandating broad opt-in consent requirements. While the legislature has adjourned until January of 2022, Rep. Elkins has indicated his intent to pursue the issue in the next session.

Proposed Digital Ad Tax Regulations Released

The Maryland Comptroller’s office has published proposed regulations for implementation of the Digital Advertising Tax. Comments will be accepted through Nov. 8. The tax is still set to take effect on Jan. 1, 2022. The proposed regulations are quite technical in nature and preliminary reviews by tax experts suggest that they do not address all of the compliance issues taxpayers will need answered prior to next year.

Privacy Receives Congressional Attention

On Capitol Hill, privacy issues have been the subject of hearings and proposed legislation but little forward action towards enacting a federal privacy bill.

Recent Congressional hearings that have touched on privacy issues have included one in the House Energy and Commerce Committee on Transforming the FTC: Legislation to Modernize Consumer Protection; a Senate Judiciary Committee hearing on Big Data, Big Questions: Implications for Competition and Consumers; and a Senate Commerce Committee hearing on Protecting Consumer Privacy.

Senators Roger Wicker, R-Miss., and Marsha Blackburn, R-Tenn., have introduced the Setting and American Framework to Ensure Data Access, Transparency, and Accountability (SAFE DATA) Act. Focusing on children’s privacy issues, Representative Kathy Castor, D-Fla., introduced the Protecting the Information of our Vulnerable Children and Youth Act. So far in the current session of Congress well over 100 bills have been introduced addressing some form of privacy, Sec. 230 or social networks and platform reforms.

There is near unanimity among lawmakers on both sides of the aisle, consumer advocates and the tech and advertising industries that everyone would be well served by a strong national privacy law. There is even broad agreement on many of the contours such a law should take. Unfortunately, given the many other priorities in Congress (infrastructure, the debt ceiling, the budget, etc.) and an atmosphere of bi-partisan deadlock and mistrust, it does not appear that a national privacy law will be enacted any time soon.

AAF believes a national privacy law would benefit consumers and businesses and is working with the Privacy for America coalition to urge Congress to move forward.

FTC Privacy Update

While Congress is deadlocked, a group of nine Democratic Senators have written to Federal Trade Commission Chair Lina Khan encouraging the Commission to begin a rulemaking process to “protect consumer privacy, promote civil rights and set clear safeguards on the collection and use of personal data in the digital economy.”

A group called Accountable Tech has petitioned the FTC to “initiate rulemaking to prohibit the anticompetitive practice of surveillance advertising.” AAF would oppose such a rulemaking and is concerned by the inflammatory moniker of “surveillance advertising.” We believe that the responsible use of data to enable interest-based advertising provides great benefits to both businesses and consumers and should, with appropriate safeguards, be permitted under a national privacy standard.

To date, AAF is unaware of any Commission response to either request.

AAF Day On The Hill Coming in March

The date for AAF’s next Advocacy and Action: Advertising Day on the Hillhas been set for March 16-17, 2022 in Washington, DC. Advertising professionals from across the country will gather to get a briefing on the important issues facing the advertising industry and go to Capitol Hill to educate lawmakers and their staffs about those issues and the vital role that advertising plays in driving the U.S. economy.

Registration is open and the cost is only $50. Information on a hotel room block will be available soon.

Many things have changed in Washington, DC since our last event, but one thing that has not—and will never—change is the importance of making our voice heard on the issues that impact how advertising industry professionals do their jobs.

Register now and plan to be in Washington, DC for AAF’s Advocacy and Action: Advertising Day on the Hill. Please contact AAF’s EVP, Government Affairs, Clark Rector if you have any questions.

Government Report

Digital Advertising May Be Linked To Infrastructure

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.

“Big Tech” Critic Confirmed As FTC Chair

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 orderthat 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 AmericaCoalition 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.”

State Privacy Update

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).

Government Report

Colorado legislature passes privacy bill

Shortly before adjourning for the year, the Colorado General Assembly passed legislation regulating data and consumer privacy in the state. As of this writing, the measure has been sent to Governor Jared Polis (D) who is expected to either sign or let the bill become law without his signature. AAF, together with allies in the state and Washington, DC, submitted comments on the measure to lawmakers, and the AAF supported Privacy for America issued a press release stating that passage of the measure underscored the need for a uniform federal data privacy law. Because of many last minute negotiations between the House and Senate, we have not yet had the opportunity to determine how many of our suggestions were adopted.

Privacy/tax measures die as legislatures adjourn

Many more state legislatures have adjourned, officially killing proposed new privacy laws in Alabama, Minnesota, New York, Oklahoma, Texas, and Vermont. While many of the bills had already been rejected, or were considered long-shots to pass, as long as lawmakers are in session the possibility exists for a determined lawmaker to resurrect a measure or attempt to add it to other legislation.

Lawmakers in Connecticut adjourned without enacting either a new privacy bill or a digital ad tax, both of which had been under consideration. However, AAF learned that privacy provisions have been included in a budget measure(pages 80-102) to be considered during a special legislation session immediately following the general session. We have provided legislative leaders with comments addressing the issue.

California privacy agency holds first meeting

The new California Privacy Protection Agency conducted its first meeting on June 13. The Agency was created by the California Privacy Rights Act a ballot initiative approved by voters on November 3, 2020. It has the administrative power, authority and jurisdiction to implement and enforce the California Consumer Privacy Act and the California Privacy Rights Act.

Much of the meeting was organizational in nature. The Agency has delayed beginning rulemaking and acknowledged the challenges ahead as many provisions of the laws are ambiguous and sometimes seemingly contradictory. AAF joined in a statement pledging to participate in the rulemaking process and reiterating our support for a uniform federal data privacy law.

Federal privacy hearings may be coming soon

Senator Richard Blumenthal (D-CT), chairman of the Senate Commerce Subcommittee on Consumer Protection, Product Safety and Data Securityhas said he expects the Committee to begin holding hearings on data privacy within the next month or two. He acknowledged the many issues competing for the Senate’s attention but identified the end of the year as a good goal for enactment of a federal privacy law.

AAFs return to Advertising Day on The Hill

The AAF is planning a return to our AAF Advertising Day on the Hill. Slated for Spring 2022, we ask that you take a moment to participate in this one-question survey to help us prepare for the event.

Take the survey >>>

Government Report

Maryland Delays Digital Ad Tax

The Maryland General Assembly passed legislation delaying implementation of the Digital Ad Tax for one year and excluding broadcasters and news media entities from the tax.

While Governor Hogan has not publicly stated his intentions, most observers in Annapolis expect him to either sign the bill or let it become law without his signature, which will happen if he takes no action by the end of May. The Maryland Comptroller’s office has already issued a Bulletin confirming the delay and announcing the intention to publish guidance and promulgate regulations for collecting the tax.

The legal challenge to the Digital Ad Tax will continue whether this measure becomes law or not.

State Privacy Update

In an unexpected, but positive, development the Florida Legislature adjourned for the year without passing overly restrictive data privacy legislation. Governor Ron DeSantis (R) and legislative leaders in both the House and Senate had all identified enacting a new data privacy law as a top priority for the year. Both chambers passed versions of the bill (HB 969, SB 1734) but could not work out differences before the legislative session ended. The biggest point of disagreement was whether the new law should include a private-right-of-action, a provision strongly opposed by AAF and most industry players. Fortunately, the Senate held fast in not including the PRA. AAF, AAF-Orlando and AAF-Tampa Bay wrote to lawmakers expressing our opposition to the bills.

Privacy bills have been introduced in numerous other states. In Texas, AAF was joined by AAF-Amarillo, AAF-Austin, AAF Corpus Christi, AAF-Houston and Ad 2 Houston and others on a letter of opposition to legislative leaders. AAF has also filed recent comments on privacy legislation in Alaskaand New Hampshire.

Previously reported on privacy bills in Hawaii, Montana, North Dakota, and Washington have all died as the legislatures in those states adjourned without passing the measures.

States Look at Taxing Advertising

Following on the heels of Maryland, other states have also seen tax bills targeting advertising and/or digital advertising. AAF wrote in opposition to a Connecticut bill targeting digital advertising. AAF alerted members in Louisiana to two tax bills of concern. One was a broad-based services tax that included advertising, the other targeted digital advertising and other digital goods. Neither bill ultimately received serious consideration.

Federal Privacy Legislation May Be Coming

The momentum may be growing for Congress to finally enact federal privacy legislation.

At a recent press briefing, Representative Jan Schakowsky (D-IL) said that the U.S. House of Representatives would convene bi-partisan roundtables to discuss federal privacy legislation. She said that the panel will invite stakeholders with different views to discuss privacy issues including “preemption and access to courts, data minimization and use limitations, anti-discrimination, and others.” Other participants set a goal of passing a federal bill by the end of 2022. Senator Richard Blumenthal (D-CT) and Representative Gus Bilirakis (R-FL) said state-level privacy actions are making a federal standard even more necessary. The AAF-supported Privacy for America tweeted, “We applaud @RepSchakowsky announcement today that House lawmakers will hold a series of bipartisan roundtables on the need for comprehensive federal privacy legislation. Americans deserve rules that prohibit harmful data practices, regardless of the state in which they live.”

In a May 9 editorial on data privacy legislation, The Washington Post said “a commitment last week by key legislators to get comprehensive regulations on the books by the end of 2022, even if doing so requires some compromise, is promising,” and argued that a failure to do so would be “embarrassing.”

To this point at least seven bills have been introduced in Congress addressing data privacy generally, with more targeting narrower issues such as children’s privacy, contact tracing, financial, health or location privacy and multiple bills addressing Section 230 reform and social networks and platforms more generally.

The AAF will continue our work with Privacy for America to urge Congress to enact reasonable privacy legislation that establishes a nationwide standard giving consumers strong protections while still enabling companies to use data in a trustworthy way and preserving the benefits that come with the responsible use of data.

Government Report

Maryland Legislators may Amend Digital Ad Tax

Lawmakers in Maryland are considering a bill amending the recently enacted digital advertising tax. If passed, the bill would delay implementation of the from January 1, 2021 to January 1, 2022 and exclude broadcasters and news media entities. While the bill appears to have widespread support, there is a question as to whether it would trigger technical provisions in the recently passed federal COVID-19 relief bill that would lessen federal aid to Maryland.

No matter what happens with the legislation, the lawsuit seeking to invalidate the digital ad tax will continue. Some legal observers believe that if enacted, the new law could increase the chances of the suit’s success.

We have received reports of lawmakers in other states, including Arkansas, Idaho, Massachusetts, New York, Texas, Washington, and West Virginia who have discussed the possibility of digital ad taxes, but none appear to be moving. AAF is in touch with local government affairs professionals in these states and is prepared to act when necessary.

State Privacy Update

Overreaching privacy legislation continues to be considered in many states.

Privacy bills in the House and Senate have been moving very fast in Florida. AAF has alerted our clubs in the state and is working closely with Jack Hebert, lobbyist for the Fourth District. We have also submitted comments to the Houseand Senate bills, as well as proposed House and Senate amendments.

AAF has also provided comments on privacy proposals in Montana. We are monitoring recently introduced legislation in Colorado, Massachusetts, New Jersey, and Texas and will act if and when it is most legislatively and politically appropriate to do so.

While AAF does not support state privacy legislation, we will continue to comment on some of the more harmful aspects of those bills. AAF believes the multiplicity and inconsistency of proposed state privacy bills further emphasizes the need for a national privacy law, such as the one proposed by the AAF supported Privacy For America.

AAF and California Clubs Oppose Commercial Mail Restriction

In California, State Senator Monique Limon (D) has introduced legislationthat would place overly restrictive and duplicative restrictions on the use of commercial mail for advertising purposes. If enacted, the measure would have negative consequences for the postal service and California jobs and would be particularly harmful to the many small California businesses that rely on this affordable method of communicating with customers.

AAF alerted our California clubs about the measure and with the Greater San Francisco Ad Club, AAF Silicon Valley and AAF Sacramento joined with many other California groups in sending a letter to legislative leaders explaining the harms that the restrictions would have for businesses and consumers. In addition, AAF District 14 Governor Heather Smith participated in a virtual meeting with Senator Limon’s staff to explain our objections. The bill is scheduled for a public hearing on April 5.

Texas Day in the Capitol

AAF Austin Government Relations Co-Chairs Cindy Brummer and Helena Abbing worked with their partners in other Texas AAF chapters and District 10 leadership to plan comprehensive education and engagement of members. As part of the strategy, they held two Fall workshops to educate participants about how the Texas Legislature works and how members can engage with legislators and prepare for a Virtual Day at the Capitol on March 2.

Helena Abbing reports on the results of the March 2 event:

Government Report

Maryland Enacts Digital Ad Tax

Despite a vigorous grassroots effort by AAF, AAF Baltimore, AAF Greater Frederick and many others, earlier in February both houses of the Maryland General Assembly voted to override Governor Larry Hogan’s (R) veto of the digital advertising tax. The bill will become law on March 14, 2021, but will apply retroactively to the beginning of the year.

The law will impose tax on gross revenues earned from digital advertising services in Maryland. While the digital advertising services tax only applies to those with global annual gross revenues or $100 million or more, AAF believes it will have a negative impact on Maryland companies and consumers and others who do business in the state.

A lawsuit has been filed in federal court seeking to invalidate the tax for violations of federal law and the U.S. Constitution. The suit alleges the Maryland digital advertising services tax:

1. Is preempted by the federal Internet Tax Freedom Act, which prohibits states from imposing discriminatory taxes on electronic commerce;
2. Regulates and burdens out-of-state commerce and penalizes extraterritorial conduct in violation of the Commerce Clause and Due Process Clause of the Fourteenth Amendment of the U.S. Constitution;
3. Interferes with the ability of the federal government to speak with one voice in violation of the foreign Commerce Clause;
4. Is void for vagueness under the Due Process Clause of the Fourteenth Amendment by inviting arbitrary enforcement; and
5. Violates the First Amendment by imposing a burdens on protected speech that are not essential to the achievement of a substantial government interest.

AAF will monitor the progress of the suit and support any efforts to overturn the digital ad tax.

Lawmakers in other states, including Indiana, Montana and Oregon have discussed similar proposals but have not yet moved forward. We suspect many lawmakers in other states will wait for a resolution of the Maryland suit before deciding whether to pursue a digital advertising tax.

Nebraska Looks at Taxing Advertising & Other Services

A Nebraska State legislator introduced legislation to lower the sales tax rate and expand the base to include all services, including advertising. The bill is similar to one introduced last year. Like the previous bill, the measure was the subject of a February hearing, but received broad opposition and is not expected to be approved.

Many of AAF’s Nebraska members responded to an alert by contacting lawmakers in opposition to the bill.

State Privacy Update

The Virginia Consumer Data Protection Act has passed both Houses of the state’s legislature and is expected to be signed into law soon by Governor Ralph Northam (D). The law, supported by Amazon and Microsoft, will give consumers the right to opt out of the use of non-sensitive data for targeted advertising, and requires companies to obtain consumers’ affirmative consent before processing “sensitive” data—including information about race, religious beliefs, health, sexual orientation or immigration status, as well as precise geolocation information and some biometric data. AAF provided comments to lawmakers on the proposed bill.

AAF has provided comments on privacy proposals in Hawaii, Montana, New Hampshire and Oklahoma, and urged our clubs in Hawaii and Oklahoma to contact their lawmakers about the proposals. We are also monitoring legislation that has been introduced in Alabama, Connecticut, Florida, Minnesota, New York and Utah and will weigh in when it is most legislatively and politically appropriate to do so.

While AAF does not support state privacy legislation, we will comment on some of the more harmful aspects of those bills. AAF believes the multiplicity and inconsistency of proposed state privacy bills further emphasizes the need for a national privacy law, such as the one proposed by the AAF supported Privacy For America.

Government Report

Maryland Digital Ad Tax to be Decided Soon

The Maryland House of Delegates has tentatively set February 8, as the date to vote on overriding Governor Larry Hogan’s (R) veto of the digital ad tax. If the House votes to override the veto, it would then go to the Maryland Senate. Because the tax is a priority of Democratic leaders in the General Assembly, and their party holds super-majorities in both chambers, convincing enough lawmakers to vote sustain the veto and kill the tax is a daunting challenge.

The American Advertising Federation, AAF Baltimore and AAF Greater Frederick continue to work with Marylanders for Tax Fairness, a broad industry coalition opposing the digital ad tax. AAF members are contacting Maryland lawmakers directly to ask them to vote to sustain the Governor’s veto. Should our efforts fail and the tax is implemented, it is likely to be challenged in court as a violation of the Permanent Internet Tax Freedom Act.

In Washington, State Representative Vandana Slatter’s (D-Bellevue) proposed digital advertising tax appears to be stalled. While there has been no official confirmation, this may be because the state Department of Revenue has given the measure a negative recommendation. AAF has urged our Washington members to stay in contact with lawmakers and continue to express opposition to any effort to tax advertising.

Privacy Update

True to expectations, multiple states have seen the introduction of privacy legislation. Unfortunately, there is very little uniformity of how they approach the issue. AAF believes that together the inconsistency of these measures underscores our believe that Congress should pass, and President Biden should sign, a national privacy law.

As previously reported, AAF continues to work with our partners in Privacy for America to advocate for a national privacy standard. We remain hopeful that this is an issue in which Congress will be able to overcome polarization and reach a bi-partisan agreement. Legislation introduced by leading members of both parties have been introduced with many areas of agreement – with each other and with industry. As this issue moves forward, AAF grassroots will be important to demonstrate local support for a national standard.

As an advocate of a national privacy standard, AAF does not support state legislation. We have, however provided comments in many states in order to mitigate some of the more harmful aspects of proposed laws. This year we have provided testimony and more detailed comments on privacy legislationin Washington. We have also submitted comments and an executive summary on a North Dakota measure, as well as comments on a proposal in Virginia.

Government Affairs Committee

The next AAF Government Affairs Committee zoom call has been scheduled for the afternoon of Wednesday, February 10. In addition to our usual legislative review, we will be joined by a representative of AAF member Facebook to hear about their many initiatives to advance privacy, address misinformation on their platform and other issues of importance. Look for an invitation to arrive in your inbox soon.

AAF Plans Day on the Hill

Due to delays in the distribution of the COVID-19 vaccine and uncertainty as to the new, ongoing security restrictions in Washington, DC and at the Capitol complex, AAF has made the difficult decision not to conduct the Advertising Day on the Hill in May of 2021 as previously announced. We look forward to resuming this important event when it is safe to do so. Thank you to all AAF members for your understanding and support.

Government Report

Tax Issues May Loom Large in 2021

Regular readers of Government Report will recall that in the winter and spring of 2020 the Maryland General Assembly passed a tax on digital advertising which was then vetoed by Governor Larry Hogan (R). Leaders of the Senate and House of Delegates have stated their intention to conduct votes in the 2021 legislative session to override the Governor and enact the tax into law. Because Democrats hold super-majorities in both chambers the advertising industry is facing an uphill fight to convince enough lawmakers to vote to sustain the veto and kill the tax.

AAF, AAF Baltimore and AAF Greater Frederick are working with Marylanders for Tax Fairness, a broad industry coalition opposing the digital ad tax. AAF members are contacting Maryland lawmakers directly to ask them to vote to sustain the Governor’s veto. AAF Baltimore President Matt McDermott joined with leaders of the Maryland Press and Broadcasters associations to pen an op-ed explaining the importance of killing the tax.

In Washington, State Representative Vandana Slatter (D-Bellevue) has released a preliminary draft of a bill tax would tax digital advertising. AAF has issued an alert to our Washington members urging them to express early opposition to the proposal in the hopes that it will not be introduced.

Given the budget crunch that most states are facing due to the Covid-19 crisis AAF anticipates we could see multiple efforts to tax advertising, either digital or all advertising. Unlike the Federal Government, nearly every state is constitutionally obligate to balance their budgets and cannot run a deficit. As of this writing, it appears likely that any Federal Covid relief bill will not include aid to state and local governments, which only make their search for new sources of revenue more likely.

Privacy Update

As expected, Californian voters approved Proposition 24, the California Privacy Rights Act (CPRA), despite the fact that the California Attorney General’s office only issued final regulations implementing the California Consumer Privacy Act (CCPA) in August, which in fact are still undergoing some modifications. AAF and our allied associations continue to submit comments to the AG’s office regarding the CCPA. Upon passage of the CPRA, we issued a statement reiterating our support for the passage of a national privacy law.

As with taxes, privacy is an area that could see an abundance of state activity, especially if state lawmakers believe that no federal law is forthcoming. Privacy is an issue in which national leaders in both parties have introduced legislation. While there are certainly areas of disagreement, such as enforcement mechanisms and state preemption, there is also broad consensus in other areas – including many with industry support.

AAF continues to work with our partners in Privacy for America to advocate for a national privacy standard and we are hopeful that such a law could pass in 2021. Because Congress is so polarized on many issues, privacy may be an area where lawmakers may choose to work together to show constituents that they can “get something done.” As the issue moves forward, AAF grassroots will play in important role in demonstrating that a national privacy standard is an issue that has strong local support.

AAF Plans Day on the Hill

AAF has scheduled the 2021 Advertising Day on the Hill for Wednesday, May 19. The event will be held in conjunction with the Leadership Immersion Training for Rising Professional Club Presidents and Presidents-Elect on May 18. We are optimistic that the vaccine rollout will allow us to gather in Washington, DC so please mark your calendars and plan to join us for these important events.

Happy Holidays

Finally, we wish you a Happy and Healthy Holiday Season and look forward to working together in the New Year.

Government Report

Senate Committee Conducts Privacy Hearing

On September 23 the Senate Committee on Commerce, Science, and Transportation conducted a hearing entitled, “Revisiting the Need for Federal Data Privacy Legislation.” The witnesses were Julie Brill, Corporate Vice President and Deputy General Counsel for Privacy and Regulatory Affairs, Microsoft and Former Commissioner, Federal Trade Commission; William Kovacic, Former FTC Chairman and Commissioner; Jon Leibowitz, Former FTC Chairman and Commissioner; Maureen Ohlhausen, Former Commissioner and Acting FTC Chairman; and Xavier Becerra, California Attorney General. During the hearing, Sen. John Thune (R-SD)submitted a letter from AAF supported Privacy for America to the record. In response to a question echoing many of AAF and Privacy for America’s concerns related to compliance and consumer protection concerns with multiple state laws Leibowitz expressed support for uniform data protections. Kovacic noted FTC’s ability to research the costs of compliance of laws. Brill added that legislation should include a scale to protect small businesses from burdensome costs.

Prior to the hearing Commerce Committee Chair Roger Wicker (R-MS), and members John Thune (R-SD), Deb Fischer (R-NE), and Marsha Blackburn (R-TN) introduced the Setting an American Framework to Ensure Data Access, Transparency, and Accountability (SAFE DATA) Act. The legislation aims to provide consumers with more choice and control over their data and directs businesses to be more transparent and accountable for their data practices. The bill would also enhance the FTC’s authority and provide additional resources to enforce the Act.

AAF and Privacy for America support an effective national privacy standard that would protect consumers while allowing consumers and businesses to enjoy the many benefits that come with the responsible use of data. Privacy for America has developed comprehensive principles for such a law and is encouraging lawmakers to adopt many them in any future legislation.

New California Privacy Initiative to Go Before Voters in November

As previously reported, the California Privacy Rights Act was verified as a ballot initiative and will go before voters in the November election. AAF has joined many of our allies in opposing the initiative. Our opposition is primarily procedural. The initiative would supplant the California Consumer Privacy Act which only became enforceable on July 1 of this year. AAF believes policymakers should take time to assess the impact of the CCPA before any changes are made.

AAF Responds to Texas Privacy Survey

AAF and allied associations recently responded to a Texas Privacy Protection Advisory Council survey seeking input regarding possible future privacy laws. The comments reminded policymakers of the many benefits that come with the responsible use of data – to consumers, businesses and the economy. While the ad industry supports effective privacy protections, the comments warned against adopting an overly restrictive approach which could undermine the aforementioned benefits to the detriment of all.

Know How to Vote

Because of the COVID-19 pandemic, voting in procedures in many states have been altered. Most states offer increased opportunities to vote early or by mail. Many states have fewer polling places because of a decline in poll workers. Be sure you know how to vote in you state to make sure that your vote counts. Local news sources and your state’s Secretary of State are both good resources to learn the correct way to vote in your state.

AAF Government Affairs Committee to Meet via Zoom

The next meeting of the AAF Government Affairs Committee will be conducted via Zoom on Tuesday, October 13 at 2:00 pm Eastern (1:00 pm Central, Noon Mountain and 11:00 am Pacific). The call will focus exclusively on privacy issues. Committee Chair Carla Michelotti and AAF EVP-Government Affairs Clark Rector will be joined by Michael Signorelli of the Venable law firm and one of the country’s foremost experts on privacy policy issues. Anyone interested in participating in the call can contact Clark Rector for registration information.

Newly Updated DAA Consumer Survey Underscores Advertising’s Increasing Perceived Value—Pegged at $1,400 Per Year

AAF members know firsthand the value of digital and mobile advertising—and so do U.S. consumers, according to a new Digital Advertising Alliance-administered survey.

According to the mid-September survey of more than 1,000 U.S. adults, Americans place a value of more than $1,400 per year on the array of free digital content, services, and mobile apps that are currently funded by advertising, according to a new survey conducted by the Digital Advertising Alliance (DAA). Respondents said those ad-supported content and services were worth $1,404 annually, an increase of $206.64—or 17 percent—over the $1,197 that respondents assigned in value to such services in a similar survey in 2016.

“With tens of millions of Americans struggling to make ends meet, ad-supported digital content and services save families significant money by reducing the cost for access to vital information, tools, and content, so it is imperative we continue our work of protecting the advertising model that helps fund those services,” said Lou Mastria, executive director of DAA. “Paying an additional $1,400 per year for access to popular websites, services, and apps is not a viable option for most Americans. The DAA will continue to provide convenient and effective tools for choice around the types of advertising consumers want to receive.”

Among the survey’s other findings:

• The vast majority (85 percent) say they would reduce their online and mobile activities if they had to pay hundreds of dollars a year for the content and services they currently get for free.
• Four in five respondents (80 percent) say they would be more likely to purchase a mobile phone offering more free apps over a comparable phone with fewer free apps.
• Nearly all the respondents (93 percent) say free Internet content such as news, weather, email, and blogs is very or somewhat important to them.
• A large majority (84 percent) say they prefer the current ad-supported Internet where most content and services are free over a paid Internet with no advertising.

Election 2020 Reminder: License the DAA Political Ads Icon and Marker for Mobile & Digital “Express Advocacy” Campaign Ads

We’re one month away for Election 2020 – which means political advertising is in the home stretch.  The DAA Political Ads Icon seeks to give voters – and campaign advertisers – necessary transparency, and is currently enforced by DAA’s two independent Accountability Partners, BBB National Programs and the Association of National Advertisers.

Using the Political Ads icon—which is free to license (subject to qualification)—and the associated disclosures that must accompany such digital political ads, we can help promote integrity in our elections.

In short, political ads on digital and mobile platforms need to be transparent and accountable, and DAA asks that each express advocacy ad, for state and federal office, at a minimum should disclose:

• Name of the political advertiser;
• Phone number, address, website, or alternative and reliable contact information for the advertiser;
• Other information required by applicable federal or state law for such notices;
• Link to a government database of contributions and expenditures for the advertiser, if applicable;
• Any disclaimers required by state or federal law, if the ad itself is too small to display them (as permitted by applicable law); and
• Name(s) of the advertiser’s CEO, executive committee, board of directors, or treasurer.

Several ad tech companies are making sure that the DAA Political Ads icon and disclosures are deliverable—and much the same way they facilitate the YourAdChoices icon with interest-based ads.

And to voters, the DAA team continues to keep a campaign-lookup data base up to date, always-on, and connected—a click or two away for voters to use to see if a particular campaign is actually registered in their home state.

Government Report

DC City Council Approves/Rejects Ad Tax

In a whirlwind three weeks, the District of Columbia City Council adopted and then rejected a 3% tax on all advertising in the city.

Late on the afternoon of Monday, July 6, DC City Council Chair Phil Mendelson released his proposed city budget for FY21 that included a 3% tax on all advertising. There had been no hearings or opportunity for public comment on the ad tax before the introduction of the budget. The budget was scheduled for it’s first reading and vote the next day.

AAF immediately issued the first of a series of alerts and urged members of AAF DC and Ad 2 DC to contact Councilmembers in opposition to the tax. While the overall budget passed unanimously, a number of Councilmembers did express reservations about the ad tax. A second and final vote was scheduled for two weeks later.

AAF, working together with AAF DC, Ad 2 DC, the DC Chamber of Commerce and many others immediately began meeting with Councilmembers via Zoom and coordinating a large-scale grassroots campaign against the ad tax.

When the Council next met on Tuesday, July 21 to consider the budget it was obvious that Councilmembers had heard from the advertising industry and were very leery about taxing advertising. In an unusual and controversial move the Council adjourned until Thursday the 23^rdso that their budget staff could find a way to rework the budget without the tax.

Upon reconvening the Council approved the changes by an 11-2 vote and gave final unanimous approval to the budget on July 28.

The DC ad tax experience is an excellent example of the effectiveness of the engaged and active AAF grassroots network. Congratulations to the members of AAF DC, Ad 2 DC and all AAF members who weighed in with members of the City Council.

Senator to Target Targeted Ads

Senator Josh Hawley R-Mo., has announced he will introduce legislation to remove Section 230 immunity from companies that display behavioral advertising or provide data to be used for them.  The Senator mistakenly alleges that the advertising is manipulative and provides no benefits to consumers. In reality, responsible interest-based advertising provides consumers with advertising they are more likely to find relevant and provides an economic underpinning for most of the content on the Internet.

The Senator’s bill is one of many introduced on the Hill to address data privacy and interest-based advertising. AAF continues to work with Privacy for America to advocate for federal privacy legislation that will clearly define accepted and prohibited data practices while preserving the benefits that come from responsible use of data.

California AG Sends Warnings Over CCPA

Shortly after the law took effect July 1, California Attorney General Xavier Becerra’s office began sending letters over potential violations of the California Consumer Privacy Act. The first letters looked at businesses that all operated online, and had “to come into compliance with respect to statements or mechanisms that they had to make available,” California Deputy Attorney General Stacey Schesser said at an International Association of Privacy Professionals event. She added that businesses that sell consumers’ information, but don’t have a “do not sell” link, “should make sure to cure that as quickly as possible.”

New California Privacy Initiative to Go Before Voters in November

The California Privacy Rights Act was verified as a ballot initiative and will go before voters in the November election. The ACLU of California, Consumer Federation of California, Public Citizen, Color of Change, and other consumer groups have come out in opposition to the initiative. “Prop 24 doubles down on the harmful idea that people should carry the burden of protecting their own privacy by filling out a bunch of forms and hoping companies do as they ask….And Prop 24 is full of loopholes and exceptions that are—how to put this delicately—real bad for privacy. Exceptions for the credit reporting industry, loopholes for big tech, no protection for workers, and new ways for the police to put a freeze on your rights,” a spokesman tweeted. No matter it’s content, the possibility of another California privacy bill, in addition to the CCPA, is further evidence of the need for a strong national standard as proposed by the AAF supported Privacy for America.

Government Report

Final Proposed Regulations to Implement the CCPA Fail Consumers and Businesses, Advertising Trade Associations Say

Ambiguous Rules, Unconstitutional Requirements, and Lack of Time to Comply Will Hurt Californians

Government Report

Congressman Supports Local Media

California Representative Adam Schiff (D-28) wrote a letter to AAF President and CEO Steve Pacheco about reports that some advertisers were blocking their advertising next to stories on digital news sites regarding the current COVID-19 pandemic. Rep. Schiff expressed concern that this practice was harming already struggling local news outlets and journalism. Pacheco responded that AAF is very sympathetic with his concerns. Not only is local media an important part of the AAF’s membership base, but a strong local media is important for the dissemination of commercial information in addition to the news.

Op-Ed Explains Importance of Data

AAF EVP-Government Affairs Clark Rector co-authored a recent op-ed that explained the many ways the responsible use of data assists local authorities and companies responding to the many challenges presented by the novel coronavirus. The op-ed goes on to argue for the necessity of a single national standard for the use of data, such as the one proposed by Privacy for America, which would provide strong consumer protection for all U.S. citizens and the assurance companies will not have to comply with multiple differing and inconsistent state laws.

Maryland Governor Vetoes Digital Ad Tax

As anticipated, Maryland Governor Larry Hogan (R) vetoed the digital ad tax passed by the General Assembly. The Assembly is expected to try to override the veto when it returns. Normally, the body would have reconvened in late May but did not because of the COVID-19 pandemic. The next session has not been scheduled and could be delayed until the Fall or next year pending the state of the health crisis. AAF Baltimore, AAF DC and the Maryland/Delaware/District of Columbia Press Association released a joint statement praising the Governor’s action.

Update on ULC Draft Model Privacy Law

The Uniform Law Commission (ULC), is working on a draft Collection and Use of Personally Identifiable Data Act (CUPIDA), which was under consideration for a summer meeting agenda.  That meeting has been cancelled and the group hopes to convene again in the Fall or Winter which would be the first time the proposed legislation could be up for discussion.

As reported last month, AAF and our industry allies have written to the ULC expressing concern with some aspects of and early draft of the CUPIDA. We will watch the group for future scheduled actions and weigh in again as necessary.

Another California Privacy Law on the Way?

A privacy advocacy group in California has reportedly collected more than 900,000 signatures for a ballot initiative to strengthen the state’s privacy law. If enough are certified the measure would be on the ballot in the Fall.

This push for a new California Privacy Rights Act comes before regulations have been finalized to implement the recently enacted California Consumer Privacy Act. Among other provisions, the new initiative would make it even more difficult for companies to use some data for advertising purposes.

In AAF’s view, this initiative is further evidence of the need for a single, national standard as is advocated by Privacy for America.

Louisiana Privacy Bill Tabled

Like policymakers in many other states, a Louisiana state lawmaker introduced legislation to place limitations on the use of information for marketing and advertising minus a resident’s consent. While the advertising industry supports strong privacy protections for all consumers, the restrictions in this bill are unclear and unreasonable. AAF and our sister associations wrote to legislative leaders explaining our opposition to the measure. The bill was considered and not moved forward at a May 11, meeting of the Louisiana House Commerce Committee.

Lawmakers Introduce Health Privacy Bill

Senators Mark Warner (D-VA) and Richard Blumenthal (D-CT) and Representatives Anna Eshoo(D-CA), Jan Schakowsky (D-IL), and Suzan DelBene (D-WA) introduced the Public Health Emergency Privacy Act to set strong and enforceable privacy and data security rights for health information used during the pandemic. The bill would require Americans to consent to participate in these efforts, and would prohibit any data collected to address the health crisis from use for other purposes such as advertising.

AAF to Host Government Affairs Call

On Thursday, June 4, at 1:00 PM Eastern time, AAF Government Affairs Committee Chair Carla Michelotti and AAF’s EVP, Government Affairs, Clark Rector will host an online meeting of the Committee. The agenda will include a brief update on current legislative issues, self-regulatory matters and AAF grassroots initiatives as well as a discussion of local priorities and activities.

Any AAF member interested in participating in call can contact Clark Rector at crector@aaf.org.

Ad Industry to Congress: Protect Data-Driven Journalism

By Dave Grimaldi, Dan Jaffe, David LeDuc, Alison Pepper & Clark Rector

The Prussian military analyst Carl von Clausewitz famously described the confusion and uncertainty around military operations as “the fog of war.”

Over the last several weeks, it often has felt like a similar fog has rolled over daily life for all Americans, as millions of people sit isolated in their homes, worried about the ongoing health crisis and dreading its economic and social impacts on our country.

Information helps clear the fog of war, allowing people to understand the facts, explore the implications, and make appropriate decisions. That’s why our nation’s data-driven businesses have mobilized over the last two months to provide unprecedented news coverage, data analysis, and public education about the many challenges related to the novel coronavirus.

Hundreds of companies, large and small, have stepped forward to use data for the greater good. Some of those efforts include helping local authorities measure compliance with social distancing guidelines, alerting public health officials to new potential virus hotspots through a network of smart thermometers, powering individualized warnings about misinformation and rumors on social networks, and even identifying possible new symptoms of the disease.

Local and national news outlets have redoubled their efforts to educate and inform Americans about the status of the pandemic and the steps they need to take to stay safe, as well as the medical and financial services being provided for support. Working behind masks and by video chat, journalists have risen to the evolving challenge by providing critical around-the-clock information, analysis, and oversight over the actions of our policymakers and elected officials.

Digital media has also provided an important channel for public service advertising, both through national pro bono advertising campaigns with the Ad Council, as well as regional efforts by states and local public health and government entities. Major social media and search platforms have undertaken their own public education campaigns to help their users answer questions and find information related to the disease.

Sadly, while the digital media industry has dedicated itself to massive new efforts around education, outreach, and analysis, the advertising revenue that supports the industry has plummeted. According to a recent survey by the Interactive Advertising Bureau, 82% of media buyers have already adjusted or paused their planned ad spend due to the coronavirus, and 37% said they have paused all advertising until the end of June.

Historically, smaller websites and news publishers have survived on revenue from advertising to their visitors under a consistent and interoperable regulatory framework. Beyond the immediate financial shock resulting from the health crisis, these digital media businesses also face longer-term challenges from new and conflicting state regulations around data and advertising.

Unfortunately, these critical businesses are already threatened by an emerging patchwork of differing state regulations that ignore the national – and global – nature of digital information and services. California has already enacted a sweeping new data privacy law, while dozens of other states are considering their own divergent, and often conflicting, legislative approaches. The chaos ensuing from that regulatory free-for-all could shatter both the technical architecture and the funding model for journalism, digital content, and ad-supported services.

This balkanized approach will also leave consumers with fragmented protections that vary from state to state, based on inconsistent requirements, untested authority, and limited resources. Instead, we should utilize the robust and proven regulatory authority of the Federal Trade Commission, particularly if it is reinforced with greater resources and rule-making authority by Congress, which is part of the approach proposed by the broad Privacy for America coalition.

A crisis can strip away less important issues and provide fresh perspectives on the things that really matter, and the last several weeks have shown the critical value of data for gathering vital information and supporting the media businesses that inform the public. Data-driven advertising provides the lifeblood of digital journalism and publishing, and fragmented state privacy efforts put that needed funding source at risk.

Drawing from the lessons of this crisis, we hope that policymakers at every level will take a fresh look at the issues around data collection and usage, so we can work together to pass national privacy legislation that allows data to be used for important public health and safety issues, preserves ad-supported news and other digital services, and provides robust consumer protections to ensure their data is used appropriately.

David Grimaldi is executive vice president, public policy, Interactive Advertising Bureau; Dan Jaffe is group EVP, government relations, Association of National Advertisers; David LeDuc is vice president, public policy, Network Advertising Initiative; Alison Pepper is senior vice president, 4A’s; and Clark Rector is executive VP-government affairs, American Advertising Federation.

Government Report

Michigan Governor Imposes/Rescinds Ad Ban

On April 24, Michigan Governor Gretchen Whitmer (D) issued an Executive Order that among other things, rescinded the advertising ban included in a previous order. The previous Executive Order addressing the COVID-19 crisis in her state sparked a well-covered protest because of the stay-at-home provisions included in the order. The order also included language that impacted advertising.

Specifically, the order prohibited stores with more than 50,000 square feet “from the advertising or promotion of goods that are not groceries, medical supplies, or items that are necessary to maintain the safety, sanitation, and basic operation of residences.” It also stated, “No one shall advertise or rent a short-term vacation property except as necessary to assist in housing a health care professional or volunteer aiding in the response to the COVID-19 crisis.”

While well intentioned, the necessity for these advertising restrictions was questionable, but the potential for harm to local media—an important source of local news and information—was not.  AAF President & CEO, Steve Pacheco wrote to the Governor asking her to rescind the advertising restrictions in the order. AAF also joined our industry allies in calling on the Governor to rescind the restrictions. Finally, we also urged each of the Michigan advertising federations to contact Governor Whitmer.

The Governor did not state her reasons for not including the ad ban in the new order, but it is reasonable to suspect that the industry protests may have played a role.

California Privacy Update

The California Attorney General’s office continues to move forward with drafting regulations to implement the California Consumer Privacy Act. Even though the regulations have not been finalized, enforcement is scheduled to begin July 1.

In late March, AAF and a group of more than 65 trade associations, organizations and companies sent a letter to the AG asking for a delay in enforcement until January 2, 2021.  However, the office has indicated it is committed to enforcing the law starting on July 1. The AG followed that response with a privacy alert to notify Californians of their rights under the CCPA and provide other information related to data and COVID-19. When the California legislature returns, it is expected to continue its consideration of legislation that would impact data and advertising, prioritizing measures related to COVID-19.

Industry Awaits Governor’s Decision on Maryland Ad Tax

IAs reported last month, prior to adjourning the legislative session due to the COVID-19 pandemic, the Maryland General Assembly approved a bill including the digital ad tax and sent the measure to Governor Larry Hogan (R). The Governor has not commented specifically on the proposal, but has been vocal in his opposition to new taxes and it is anticipated that he will veto the measure. The Governor must veto or approve the measure the first week of May.

Should the Governor veto the bill, the General Assembly could try to vote to override when it returns. Legislative leaders had hoped to reconvene in May, but have announced that will not happen. The next session has not been scheduled and could be delayed until the Fall or next year pending the state of the health crisis.

ULC May Draft Model Privacy Law

The Uniform Law Commission (ULC) is working on a draft Collection and Use of Personally Identifiable Data Act (CUPIDA). The ULC works for the uniformity of state laws by drafting model legislation for consideration by state lawmakers.

AAF and our industry allies have written to the ULC expressing concern with some aspects of and early draft of the CUPIDA.  For example, the draft would allow private rights of action by individual citizens which would likely lead to a flood of frivolous and expensive litigation.  The draft would also provide state Attorneys General the authority to “adopt rules and regulations to implement provisions of the Act” which would undermine the goals of uniformity.

The letter expresses our work with Privacy for America and support of a national data privacy standard that would clearly define prohibited practices, protecting consumers while preserving the benefits that come from the responsible use of data.

Government Report

Maryland Accepts/Rejects Ad Tax Bills

Before adjourning the legislative session due to the COVID-19 pandemic, the Maryland General Assembly approved a bill including the digital ad tax and has sent the measure to Governor Larry Hogan (R). The Governor has not commented specifically on the proposal, but has been vocal in his opposition to new taxes and is expected to veto the measure.

The Governor has until May 6, to veto or sign the bill into law. The General Assembly hopes to be able to return to session in late May to consider veto overrides and other business. All plans are currently tentative and subject to change based on current events.

AAF Baltimore President, Matt McDermott and AAF National EVP of Government Affairs, Clark Rector each testified against the tax before the legislative tax writing committees. AAF has asked the Governor to veto the measure and encouraged the members of our two Maryland advertising federations to do so as well. Should the bill ultimately be enacted into law, it is likely to face numerous legal challenges due to its violation of the Permanent Internet Tax Freedom Act and other constitutional challenges.

In better Maryland news, the introduced bill to reduce the sales tax rate but expand the tax to include many services, including advertising, was decisively rejected in a lop-sided bipartisan vote. AAF Baltimore VP, Ashlene Larson and AAF National EVP of Government Affairs, Clark Rector, both attended the Ways and Means Committee hearing to express opposition.

New York Targets Digital Ads

New York State Senator and Deputy Majority Leader Michael Gianaris has introduced a billvirtually identical to the Maryland proposal which would place a gross receipts tax on the digital advertising revenues of companies with global annual gross revenues exceeding $100 million.  Immediate action is uncertain, but the AAF has weighed in with lawmakers against the proposal and will work with our local members and other allies to actively oppose the measure.

Privacy in the States

In Washington, the legislature adjourned without a final agreement on SB 6281 which dealt with the management and oversight of personal data. While AAF supports the state’s interest in protecting the privacy of its citizens, we believe a number of provisions in the bill would have undermined privacy protections for Washington residents and created undue burdens for businesses.

AAF and our allies continue to communicate with the California Attorney General urging him to delay enforcement of the California Consumer Privacy Act. Given current events, and the fact that implementing regulations have still not been finalized, we believe it will be inherently more difficult for businesses to meet the current July 1, 2020 deadline.

Privacy Fly-In Postponed

The National Privacy Summit and Fly-In planned for March 24 by Privacy for America was postponed.  We hope to reschedule when the current crisis is resolved.

A Special Message from AAF President & CEO, Steve Pacheco

AAF Staff, AAF Members, AAF volunteers, AAF sponsors and supporters—they all have more than a few things in common.

They are passionate about Advertising, and the Advertising business.

• They are constantly curious & creative.
• They are smart and wise and intelligent.
• They are problem solvers and they love a challenge.
• They are almost always positive people with a positive outlook.
• They have been through lots of trials and tribulations.
• They are survivors.
• They have more than a few good stories.

And there’s probably a lot more that I left off, but I think you get the point. This group can handle whatever life throws at them. And life has thrown a few curve balls at all of us over the past few weeks. As someone once said, “it’s not what happens to you—it’s how you respond to it.” And we will respond to all of this as a community. The AAF network can be a great resource for you during these tough times. Call on your AAF friends and colleagues for help and support—they are a very resourceful group.

Keep this one thought in mind as you go through your days and nights—working from home—making conference calls—home schooling your kids—practicing Social Distancing…

We will all get through this together.

After all, we are “The Unifying Voice For Advertising”

I will submit to you that a combination of great leadership and authentic compassion will get us all through all of this.

And we will have a few more stories to tell.

Take care. Stay healthy. Be well.

—Steve

Government Report

Rebecca Snyder and Matthew McDermott (AAF Baltimore): Taxing digital advertising and services to pay for Kirwan will harm Maryland’s economy

Maryland legislators are proposing significant new taxes to pay for the Kirwin Commission’s education reform recommendations. Delegates and senators are mulling a new digital advertising tax (SB 2 / HB 695) and an expansion of the sales tax to include professional services (HB 1628).

Where does that leave Marylanders?

Maryland citizens will be left footing the bill for these additional taxes. It is unrealistic to imagine that businesses can singlehandedly absorb substantial new taxes, on top of other recent legislative mandates, without passing along at least some of those costs to consumers. Of special concern is the focus on taxing ads and advertising services.

Advertising connects consumers to products and enables businesses to grow. Taxing advertising and advertising services will choke economic growth.

Read the full article at the Capital Gazette >>>

Government Report

Maryland, Nebraska Look at Advertising Taxes

On January 29 the Maryland Senate Committee on Budget and Taxation held a hearing on SB 2 which would place a gross receipts tax on digital advertising. AAF Baltimore President, Matt McDermott and AAF EVP of Government Affairs, Clark Rector both testified against the proposal.

While the bill targets global companies with digital advertising revenues over $100,000,000 McDermott explained how the tax would ultimately also hurt Maryland businesses and consumers. Rector used the opportunity to remind Senators of the importance of advertising to Maryland and how digital advertising gives both small and large Maryland companies the ability to compete far beyond the state’s borders. Both received favorable coverage in the Baltimore Sun.

The next steps for the bill are uncertain, but because it is sponsored by the current and former Presidents of the State Senate it must be taken seriously.

Two ad tax bills have been introduced in the Nebraska legislature. LB 946 would extend the state sales and use tax to all services unless specifically exempted. No exemption for advertising is mentioned in the bill’s language. LB 989 would impose the sales and use tax to digital advertising. Because Nebraska has a very short legislative session this year, and the governor has pledged not to raise taxes, these bills are not expected to be enacted. However, many observers in the state believe that they could lay the groundwork for more serious consideration next year. In March, AAF Omaha and AAF Lincoln will host their annual joint legislative reception. The proposed ad taxes are sure to be a subject of discussion.

Privacy, Self-Regulation Update

AAF and our allied advertising associations have asked California Attorney General Xavier Becerra to delay enforcement of the California Consumer Privacy Protection Act. The new law went into effect on January 1 of this year with enforcement set to begin on July 1. Unfortunately, the final regulations have not been finalized, leaving thousands of covered companies in a state of uncertainty as to what exactly they will be complying with. The letter asked that the Attorney General delay enforcement actions until six months after the regulations are finalized.

While the industry waits for final rules, the Digital Advertising Alliance, in which AAF is a founding member, has created several new resources to help advertisers, publishers, agencies and ad tech companies in their compliance journey.

CA’s Do Not Sell My Info

With California’s “Do Not Sell My Personal Info” (DNS) mandate, DAA saw an opportunity to advance a privacy control experience for consumers that mirrors what’s been in market for the better part of a decade for opting out of data collection for interest-based advertising (IBA) with WebChoices and AppChoices.

DAA’s new DNS tools for California citizens—built into the latest version of its AppChoices mobile app, and browser-based “Opt Out Tool” that is similar to WebChoices—enables third parties (ad tech) to complement first parties (site and app owners) in their own opt-out “do not sell my personal information” regimes for consumers.

Overarching all of this is a new Privacy Rights icon that publishers can use on their sites and apps to extend transparency regarding their data “sales” practices—again mirroring the ubiquitous YourAdChoices icon they already see on footers and app settings for hundreds of companies and thousands of brands regarding data used for interest-based advertising.

While AAF strongly prefers a single national standard for data privacy, we are pleased to see these new CCPA-focused tools come to market. The goal is to help advertisers, agencies, publishers and ad tech companies manage this “new” privacy mandate and novel aspect of law. It is very possible other states could mimic what California has done.

DAA has rolled out a new Resources section related to the new Privacy Rights icon that publishers may use to convey their CCPA and “Do Not Sell My Personal Info” option(s) and disclosures on their digital properties and link to DAA’s DNS Opt Out Tool—both browser-based and app.  Web forms to license the Privacy Rights icon and participate in DAA’s CCPA opt out-related tools are available there. The slides from the AAF/DAA privacy webinar are available there, with the full webinar available on the AAF website.

Meanwhile, as 50 states may further consider their own efforts to legislate in 2020—with new laws taking effect in California, Nevada and Maine as the last quarter and New Year passed—it’s paramount that we all work to manage the emerging patchwork. AAF and DAA are helping to drive the Privacy for America initiative to enact a comprehensive U.S. federal privacy law built upon a pragmatic, principled policy framework.

Political Ads: Required Disclosures

January 1, 2020, marked another milestone for DAA:  its Political Ads transparency and accountability program is now enforceable by DAA’s independent Accountability Partners. As we enter a Presidential Election year, we have a responsibility to make sure online “express advocacy” ads for state and federal offices deliver transparency to voters—by helping to ensure these political ads we see are placed by valid, registered campaigns.

Using the Political Ads icon—which is free to license (subject to qualification)—and the associated disclosures that must accompany such digital political ads, we can help promote integrity in our elections.

In short, political ads need to be transparent and accountable. And already several ad tech companies are making sure that the DAA Political Ads icon and disclosures are deliverable—and much the same way they facilitate the YourAdChoices icon with interest-based ads.

And to voters, the DAA team continues to keep a campaign-lookup data base up to date, always-on, and connected—a click or two away for voters to use to see if a particular campaign is actually registered in their home state.

Government Report

AAF Supports National Privacy Law

AAF President Steve Pacheco has joined other association leaders of the Privacy for America coalition to call on Congress to enact federal privacy legislation. Given the recent enactment of the California Consumer Privacy Act (CCPA), and likely consideration of similar measures in other states (see below), a strong federal privacy law that protects all American consumers and provides for a single set of standards for businesses in every state to follow is more important than ever.

The members of Privacy for America support legislation that removes consumers burden by creating a standard of clear and enforceable requirements for businesses to collect and use data responsibility, better inform consumers how their data is being used and outlaw harmful data practices.

Legislation should make plain what data uses are forbidden. For example, companies should not be allowed to use someone’s personal information, unless specifically permitted by federal or state law, to deny them a job, credit, insurance or health care.

Similarly, the most sensitive types of personal information—such as medical, financial or biometric information—must not be used without the consumer’s explicit permission.

Companies should be barred from sharing a consumer’s personal information with third parties, unless they have enforceable contracts ensuring the data will be secured and used lawfully.

To insure that regulators have the necessary resources to investigate and punish bad actors, Privacy for America supports the creation of a new Data Protection Bureau at the Federal Trade Commission, including additional staff and resources to fulfill the mission.

The letter is timely as the Senate Commerce Committee is said to be planning a December 4, hearing on privacy and data issues. In addition, Senate Democrats recently released principles for a privacy and data protection framework.

State Privacy Update

Not all potential action is at the federal level. AAF has heard reports of possible data and privacy legislation in Maryland, New Jersey, New Mexico, New York, Oregon and Washington during the 2020 legislative sessions. Other states are likely to join the list.

In October, California Governor Gavin Newsom (D) signed into law a measure requiring “data brokers” to register with the state attorney general. The measure is an amendment to the CCPA. AAF and our industry partners wrote to the governor opposing the bill because we believe the definition of data broker is so broad that it would include businesses conducting routine activities such as analytics and fraud detection, resulting in numerous problems for consumers, the attorney general and businesses.

California Attorney General Xavier Becerra (D) has announced a series of public forums across the state the week of December 2, to take public comment on the regulation released to enforce the CCPA.

The AAF supported Digital Advertising Alliance (DAA) has announced a cross-industry tool for publishers, brands, agencies and adtech in the digital advertising supply chain to provide consumers a mechanism to opt out under the California Consumer Privacy Act.
 
The DAA tool enables publishers to display a CCPA-mandated text link and a unique icon to California users. Clicking on the link directs users to publisher information and options, including access to the CCPA Opt-Out Tool, if third parties collect and sell data from the property.

The CCPA Opt-Out Tool, consistent with the existing DAA Choice Tool, gives consumers broader privacy control than required under the CCPA by allowing them to opt out of the sale of personal information across all of the DAA participating companies integrated into the new tool from a single website.

AAF Plans Privacy Webinar

The AAF will be hosting a webinar on December 9 to provide members with more information on privacy issues, including:

• the forthcoming California Consumer Privacy Act as well as other state laws that have been enacted
• the prospects for a pre-emptive federal privacy law as enveloped in the Privacy for America initiative, and a
• review of political ad transparency initiatives, namely the DAA About Political Ads program, with tips on how to implement as campaign season for the 2020 Election begins.

The 60-minute webinar will discuss the current state of regulation/self-regulation—and how marketing data users in advertising need to be prepared.

The webinar will be December 9, at 2:00 pm Eastern (1:00 pm Central, 12:00 noon Mountain and 11:00 am Pacific). Participants can register for the webinar here.

Senators Target DTC Advertising

Senators John Cornyn, R-Texas and Richard Blumenthal, D-Conn., have written legislative language requiring pharmaceutical advertising to include the price of the advertised drug. In the past, they tried unsuccessfully to attach the language to an omnibus appropriations bill and have indicated they may do so again. AAF is skeptical about the measure on First Amendment grounds, and in part because drug pricing, insurance, subsidies and other factors, are rarely straightforward and the disclosures would unlikely reflect what consumers actually pay for medications.

Senate Bill Would Limit Tobacco Ad Tax Deduction

Senator Jean Shaheen, D-NH has introduced a bill that would deny the tax deductibility of the advertising for E-cigarette and tobacco advertising. AAF opposes the measure because the First Amendment prohibits banning or taxing commercial speech based on the content of the speech. No action has been scheduled on the measure.

AAF Grassroots in Action

AAF grassroots are hard at work representing their members and the advertising industry before state lawmakers. AAF ad clubs in Texas and Florida recently conducted Days in their state capitols. Here are two recent reports.

On Tuesday October 22nd, Kevin Couch, AAF Dallas Government Chair organized the first ever Texas Capitol visit for the AAF District 10 Chapters. Participation from several chapters such as AAF Austin, AAF Corpus Christi, Ad 2 Dallas, AAF San Antonio is what made this day have such a tremendous impact on our efforts to advance our organization with policy makers at the State Capitol. 
 
The days topics were really focused on our National AAF policy stance on the Data Privacy Standards—of which a Texas lawmaker introduced a bill in the previous session to have a “Texas Version” of CCPA. We were successful in making our views known and developing relationships. 
 
There are plans in the works for a strategic conversation with both Republican and Democratic caucuses preceding the next session, and that will have tremendous impact because we will be talking directly to the legislators and their Chiefs of Staff at those meetings!

Kevin Couch, AAF Dallas Government Chair

Members of the AAF’s Fourth District held another successful Advertising Day at the Capitol recently on November 5th  in Tallahassee. Over 40 members from across Florida participated in the annual event offering one-on-one meetings with House and Senate members to discuss issues of interest to the advertising community.
 
Topping their list of concerns was the need to continue the existence and funding for Visit Florida, a public-private partnership dedicated to tourism marketing for the Sunshine State which has been under fire in recent years. Members also lobbied for a new tax rebate program designed to attract film and digital entertainment production in hopes of filling the void created when lawmakers decided to end funding for Florida’s film incentive programs several years ago.
 
“It’s definitely one of the most important events we hold as a district each year,” said District 4 Gov. Mike Weber. “And I have yet to hear anything but positive comments from our members who give up a day of their time to better understand a day in the life of an elected official.”

Jack Herbert, AAF Fourth District Lobbyist/Government Relations

Government Report

Privacy Updates

The California legislature has adjourned for the year, meaning there will be no more opportunities to amend the California Consumer Privacy Act before it goes into effect on January 1, 2020. While this is a California law, it will have a nationwide impact as it has implications for any company that does business in that state.

The CCPA applies to all businesses in California that have gross revenues over $25,000,000; buys, sells or shares the personal information (PI) of 50,000 or more consumer, households, or devices; or derives 50% or more of its annual revenue from selling consumers’ personal information. The bill also grants consumers specific rights, including:

• The right to be informed about a business’ practices regarding a consumers’ personal information and of the specific PI held by the business
• The right to request that a business or services provider delete any PI held, except in certain circumstances
• The right to direct a business that sells consumers’ PI to no longer sell their PI
• A business cannot discriminate against a consumer for exercising any of these rights.

Many questions about the enforcement of the law will not be answered until the Attorney General issues regulations or guidance for businesses. The Attorney General’s office has released a Standardized Regulatory Impact Assessment which demonstrates the potential scope of the new law.

According to the document the law will cover between 15,643 and 570,066 businesses in California and the costs for businesses to comply with the regulations will be between $467 million and $16.454 billion over the next decade depending on the number of businesses impacted. The report does not consider the impact of the CCPA on businesses outside of California.

Before adjourning, the legislature passed legislation requiring “data brokers” businesses to register with the state Attorney General’s office. Data brokers are defined as businesses that “knowingly collects and sells to third parties the personal information of a consumer with whom the business does not have a direct relationship.”

AAF and our association partners opposed the legislation and have written a letter to California Governor Gavin Newsom asking him to veto it.  We are concerned in part that the definition of data brokers is overly broad and may include ad networks and other businesses not normally considered data brokers.

AAF continues to work with other members of Privacy for America to advocate for a federal privacy law that would protect consumers while allowing businesses to engage in responsible online data collection and use.

AAF, Advertising Coalition Oppose DTC Pricing Amendment

The Advertising Coalition, of which AAF is a founding member, sent a letter to the leaders of the Senate Appropriations Committee opposing a proposed amendment to the Labor and Health and Human Services Appropriations bill that would have required wholesale acquisition cost information for prescription drugs to be included in direct-to-consumer advertising of pharmaceuticals. The scheduled committee “mark-up” of the bill was postponed leaving no opportunity for the amendment to be introduced. Committee consideration of the bill has not been rescheduled as of this writing.

California Consumer Privacy Act Update
California legislators continue to consider legislation to implement the California Consumer Privacy Act by the January 1, 2020, deadline. Concurrently, advertising industry representatives are working with lawmakers to ensure the final law and regulations will not unnecessarily hamper businesses ability to responsibly use data to help market products and services to California consumers.

The situation remains fluid with changes occurring on a seemingly daily basis. Legislative leaders hope to have all changes finalized before their summer recess begins on July 12, with final votes occurring when they return in August.

Texas Enacts Privacy Law
Prior to adjourning for the year, the Texas legislature passed legislation that strengthens notification requirements in the event of a data breach affecting sensitive personal information. The new law also creates the Texas Privacy Protection Advisory Council which is charged with studying the privacy laws in Texas and other jurisdictions and making recommendations about prospective changes to Texas law. AAF will monitor the actions of the Council once it has been formed and provide comments and take other action as appropriate.

Federal “Do Not Track” Bill Introduced
Multiple federal privacy bills have been introduced, including a recent one by Sen. Josh Hawley, R-Mo., that would establish a Do Not Track registry for online data collection similar to the Federal Trade Commission’s Do Not Call list which allows people to say they do not want to receive telemarketing calls. The bill would allow consumers to opt out of companies collecting data beyond what is “necessary” for the services to run.

As has been reported in previous newsletters, AAF is supportive of the enactment of a national privacy standard. We joined in a letter to the Federal Trade Commission supporting the concept and have been participating in meetings of the Privacy for America Coalition, consisting of with many allied associations and companies, to flesh out the specifics of what a national privacy law might look like. In general, AAF and our allies support legislation that would

·       Protect consumers nationwide

·       Establish new prohibitions on certain data practices, including eligibility, discrimination, assisting and facilitating fraud, and sensitive data

·       Create a New Data Protection Bureau at the Federal Trade Commission

·       Grant enhanced rule-making authority to the FTC

·       Ensure responsible advertising practices

·       Require strong data security protections, and

·       Authorize strict penalties for violations.

AAF will continue to work with our industry members and partners to advocate for a strong national privacy law that protects both consumers and industry.

AAF Supports Adequate Funding for Census
Recognizing that a reliable demographic information about the U.S. population is critical for advertising and business, in addition to governmental representation and operations, the AAF has joined other leading business organizations on a letter to the leadership of the House and Senate Appropriations Committees asking for sufficient funding for the upcoming 2020 census.  Accurate information is essential so that advertisers can make informed decisions when allocating marketing resources.

HHS Requires DTC Price Disclosure
The U.S. Department of Health and Human Services has enacted a rule requiring that direct-to-consumer advertising of prescription medications include the whole acquisition cost (WAC or list price). Three pharmaceutical companies and the ANA have challenged the rule on free speech grounds. AAF shares the concerns that compelled speech violates the First Amendment. We also believe that the information is likely to cause confusion since few patients pay the list cost since the majority is covered by insurance or government health programs. The suit seeks a declaratory judgment invalidating the rule, which is due to go into effect in July. No matter the ruling of the initial court, an appeal by the losing side seems likely. AAF will considering weighing in with an amicus brief if and when such action is appropriate.