What is Adtech? With CCPA Imminent, Technology Companies Seek Advertising Exemptions

Adtech CCPA - What You Need to Know About Advertising Technology Exemption to CCPA

The California Consumer Privacy Act (“CCPA”) is slated to become effective January 2020, and many technology companies are lobbying to have the legislation include new exemptions for advertising technology, or as it is often referred to in the industry, for “adtech.”  

Large Online Advertising Companies Use Adtech to Track Consumer Interests 

As discussed in previous blog posts, the CCPA is considered to be GDPR-lite because many experts consider it to be a less stringent version of the European Union’s General Data Protection Regulation (“GDPR”).  Some of the GDPR’s most well-known provisions give consumers the right to ask companies what type of sensitive personal information has been collected about them as well as the right to ask companies to entirely delete that personal information.  The GDPR also allows for consumers to ask companies to stop tracking them for behavioral/advertising targeting purposes.  While the CCPA is not as stringent as the GDPR in other places, it does include the aforementioned provisions designed to protect consumers and their personal data.  This will affect the use of adtech by technology companies seeking to track consumers online.

Most consumers have had some sort of interaction with “targeted” or “behavioral” tracking.  In laymen’s terms, this basically means that companies will track, among other behaviors, a user’s web-browsing history, web searches, location, and even what they put in or take out of online shopping carts.  If a consumer has ever wondered why they may search for baby formula one day, only to have ads for strollers or preschools show up on later websites they browse, they can thank adtech.  

Companies Scramble Seeking Adtech Exemptions Before CCPA Becomes Effective

While many companies do disclose that they track such information to “better tailor” one’s viewing experience, extensive studies have shown that it is nearly impossible to truly “opt out” or delete these adtech digital footprints.  This all changes, however, if other states follow California’s lead and enact legislation similar to the CCPA.  

With the date for enaction looming ahead, in less than four months to be exact, experts in the field have noticed that many technology companies have already began media campaigns and hired lobbying groups to subtly suggest that the CCPA is not as consumer-friendly as it purports to be.  Data recovered shows that one well-known lobbying group, the Internet Association, has already spent more than $176,000 on a campaign to disparage the CCPA and encourage consumers to push for adtech exemptions.  

Ads Geared to Scare Consumers into Requesting Adtech Exemptions

The ad campaign, which has already been going on for three months, subtly pushes for adtech exemptions by ominously and vaguely warning Internet users that the CCPA will increase the cost of transactions on the Internet, specifically the campaign has relied on messages warning consumers that the CCPA will make every click “cost you.”  The reasoning behind such campaigns is that technology companies are vaguely suggesting that, without the revenue garnered from targeting advertising, they will be forced to pass on the increased costs to Internet users.     

Technology companies have said that the CCPA and similar legislation should include adtech exemptions to avoid harming end users.  If the technology companies are to have their way, such advertising exemptions would be worded to allow companies to be exempt from the stringent protections of the legislation if the behavior in question is for “business purposes that include behavioral ad targeting.”  Companies that rely on adtech would also want safe harbors or exemptions from provisions that allow consumers to opt out of tracking technology or permanently delete their history. 

What Will the CCPA’s Impact Truly Be on Adtech and US Technology Companies?

While it is true that many technology giants are poised to lose billions in adtech revenue should the CCPA pass in its current form, it is hardly believable that such legislation will cripple these companies.  The passage of the GDPR did result in highly visible fines for companies like Facebook, but all the technology giants that blanched at the idea of the GDPR still exist very much today.  

As such, consumers shouldn’t automatically fear that the loss of adtech revenue will be passed on to them. With new legislation comes learning and evolution in technology. Smaller companies that rely on adtech may benefit from consultation with experienced Internet and privacy attorneys to understand the implications of the CCPA and how it may affect them starting in 2020.

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internet & ecommerce

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