FEDERAL, STATE & LOCAL LEVEL.
AAF’s Government Affairs Committee is comprised of individuals with a interest and passion for government affairs and legislative issues surrounding the advertising industry. The committee meets monthly via conference call to discuss key legislation, supporting activities, and upcoming events. If you are interested in joining the committee, please contact Clark Rector.
Click the dates below for recent updates and activities.
July 15, 2021
October 15, 2021
AAF Comments on
Proposed Digital Ad
AAF Day On
The Hill Coming
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.
July 15, 2021
July 15, 2021
May Be Linked
“Big Tech” Critic
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
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).
June 17, 2021
June 17, 2021
Passes Privacy Bill
die as legislatures
agency holds first
hearings may be
AAF’s return to
on The Hill
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.
May 14, 2021
May 14, 2021
Digital Ad Tax
Maryland Delays Digital Ad 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.
March 31, 2021
March 31, 2021
may Amend Digital
AAF and California
Texas Day in
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:
AAF Announces Next Government Affairs Committee Meeting
The next AAF Government Affairs Committee online meeting has been scheduled for Tuesday, April 13 at 3:30 pm Eastern (2:30 Central/1:30 Mountain/12:30 Pacific).
Our special guest will be Emily Karp, Google’s Global Product Manager focusing on Ads Privacy. Emily will be discussing Google’s Privacy Sandbox initiative. It promises to be a very educating session. For background and more information participants may want to review these blog posts and Think with Google article:
Preregistration is not required.
AAF members can access the meeting here >
February 25, 2021
February 25, 2021
digital ad tax
Nebraska looks at
taxing Advertising &
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:
- Is preempted by the federal Internet Tax Freedom Act, which prohibits states from imposing discriminatory taxes on electronic commerce;
- 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;
- Interferes with the ability of the federal government to speak with one voice in violation of the foreign Commerce Clause;
- Is void for vagueness under the Due Process Clause of the Fourteenth Amendment by inviting arbitrary enforcement; and
- 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.
January 28, 2021
January 28, 2021
Maryland digital ad tax
to be decided soon
Day on the Hill
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.
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.
December 21, 2020
December 21, 2020
Tax Issues May Loom
Large in 2021
Day on the Hill
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.
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.
Finally, we wish you a Happy and Healthy Holiday Season and look forward to working together in the New Year.
September 30, 2020
September 30, 2020
New California Privacy
Initiative to Go Before
Voters in November
AAF Responds to
Texas Privacy Survey
Know How to Vote
to Meet via Zoom
Updates from the
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
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.
July 31, 2020
July 31, 2020
DC City Council
Senator to Target
Privacy Initiative to
Go Before Voters
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 23rdso 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.
JUNE 8, 2020
June 08, 2020
by the Office
of the California
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
Final proposed regulations submitted by the Office of the California Attorney General (CA AG) to implement the California Consumer Privacy Act (CCPA) fail to provide businesses with needed clarity and time to comply and contain unconstitutional requirements that exceed the CA AG’s authority and could frustrate consumers, according to several leading advertising trade associations. The American Association of Advertising Agencies (4A’s), American Advertising Federation (AAF), Association of National Advertisers (ANA), Digital Advertising Alliance (DAA), and Interactive Advertising Bureau (IAB) voiced concern that unclear regulations will further harm businesses and the state economy during difficult economic times. The groups also asked the Office of Administrative Law (OAL) to reject the unconstitutional mandates added to the regulations.
“Our organizations advocate for extending strong privacy protections to all Americans and support the comprehensive framework for national legislation developed by the Privacy for America coalition,” said Clark Rector of AAF. “The new approach outlined by the coalition is more comprehensive than the CCPA, provides robust protections for consumers, clearly outlines prohibited data practices, and is backed by strong enforcement.”
Read the full article delivered by:
MAY 29, 2020
May 29, 2020
Importance of Data
Vetoes Digital Ad Tax
Update on ULC
on the Way?
Health Privacy Bill
AAF to Host
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 email@example.com.
MAY 16, 2020
May 16, 2020
Ad Industry to
Ad Industry to Congress: Protect Data-Driven Journalism
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.
APRIL 30, 2020
April 30, 2020
on Maryland Ad Tax
ULC May Draft
Model Privacy Law
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.
MARCH 26, 2020
March 26, 2020
Ad Tax Bills
New York Targets
Privacy in the
A Special Message
from AAF President &
CEO, Steve Pacheco
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
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.
MARCH 2, 2020
March 2, 2020
Maryland Ad Tax
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.
Look at Advertising
CA Do Not Sell
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.
AAF Supports National
State Privacy Update
Senators Target DTC
Senate Bill Would
Limit Tobacco Ad
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 consumer
s 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
Coalition Oppose DTC
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.
Privacy Act Update
Texas Enacts Privacy Law
Federal “Do Not Track”
AAF Supports Adequate
Funding for Census
HHS Requires DTC
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.