What Advertisers Need to Know About the Latest U.S. Consumer Privacy Reforms

The Biden Administration recently published a slate of reforms for overhauling Section 230 and drafting new consumer privacy and technology laws in the latest signal that bipartisan progress is being made against issues of consumer privacy and personal data security at the federal level.

The Biden Administration hosted a listening session with experts and practitioners, formulating technology reforms around consumer privacy protections, increasing transparency, and algorithmic standards, among other topics. 

The reforms come at a pivotal time for the industry, with five state privacy laws in California, Virginia, Colorado, Connecticut, and Utah, that are set to go into effect in 2023, creating a new patchwork of consumer privacy protections for advertisers to prepare for. 

A new IAB report out this week argues privacy legislation, not cookie deprecation, remains the biggest challenge facing advertisers heading into 2023.

Coinciding with a listening session with experts and practitioners, the core principles released by the White House for technology reforms centered around consumer privacy protections, competition, online safety standards for children, increasing transparency around algorithms and content moderation, and the removal of special protections granted under Section 230 of the Communications Decency Act. 

Promote Competition in the Technology Sector

The first reform advocated for establishing “rules of the road” to ensure a “level playing field,” promoting innovation for American companies and continued U.S. leadership in global technology. The White House urged that legislation is necessary to “address the power of tech platforms through antitrust legislation.”

Provide Robust Federal Protections for Americans’ Privacy

Clear limits on the ability to collect, use, transfer, and maintain personal data are necessary, which include “limits on targeted advertising.” According to the announcement, “Limits should put the burden on platforms to minimize how much information they collect, rather than burdening Americans with reading [the] fine print.” 

Protect Children with Stronger Privacy and Online Protections

This core principle detailed that “platforms and other interactive digital service providers should be required to prioritize the safety and wellbeing of young people above profit and revenue.” This would include product design and “restricting excessive data collection and targeted advertising to young people.”

Remove Special Legal Protections for Large Tech Platforms

Special protections under Section 230 of the Communications Decency Act should be “fundamentally” reformed, a demand “long called for” by the Biden Administration. 

Increase Transparency Around Platform Algorithms and Content Moderation Decisions

Insisting that “tech platforms are notoriously opaque,” the White House calls on platforms to provide “sufficient transparency to allow the public and researchers” the ability to see how algorithms operate and understand the principles informing how content moderation decisions are made.

Stop Discriminatory Algorithmic Decision-Making

The Biden Administration calls for strong protections that would be needed to ensure algorithms aren’t discriminating against protected groups, such as by failing to share key opportunities equally, by discriminatorily exposing vulnerable communities to risky products, or through persistent surveillance. 

These reforms don’t directly translate to regulatory action but establish clearer expectations of how the Biden Administration expects U.S. legislators to act on these issues. The recommendations were delivered just ahead of five state privacy laws going into effect in 2023, including the California Privacy Rights Act (CPRA) and the Virginia Consumer Data Protection Act (CPDA) on January 1, 2023.

With the American Data Privacy and Protection Act (ADPPA), a federal privacy bill that’s gained bipartisan support, introduced on the floor of the U.S. House of Representatives this summer, the IAB states in a new report that privacy legislation, not cookie deprecation, is the biggest challenge facing advertisers.

Managing different legal standards across the United States will continue to be a challenge heading into 2023, as brands are charged with creating consistent measures and protocols that maintain compliance across a patchwork of privacy regulations.