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A Marketer's Guide to the Next Congress

Lest the online marketing community think that the danger of legislation unfriendly to the industry is past now that Congress is in a lame duck session, consider this: In early December, the House subcommittee for commerce, trade, and consumer protection will hold a hearing on Internet privacy, with a focus on a Do Not Track registry. (via the Washington Post).

The hearing will likely focus on an Internet privacy bill presented by subcommittee chairman Bobby Rush (D-Ill.), the Post reports, citing sources on Capitol Hill, and that he plans to introduce again in the lame duck session.

The Current Focus

There are many long-standing legal issues of which marketers must be aware - some of which we outlined in our last report in this area.

In this report we are focusing on the next-generation of legal or regulatory issues that Congress and the Administration is likely to emphasis. The House takeover by Republicans is not likely to sidetrack many of these issues, such as a federal privacy bill or do not track legislation, although chances are good that business interests will be more of a focus.

New House Leadership

But not in all cases. The tech community lost a friend with Rep. Rick Boucher's loss in Virginia, Politico reported. Boucher, who has spearheaded numerous initiatives, was defeated by state House GOP Leader Morgan Griffith leaving a leadership void on the Communications, Technology and the Internet Subcommittee. Also elected was Richard Blumenthal in the Senate. A Democrat from Connecticut, the tech community is watching him warily as he investigated a number of tech firms as attorney general, including Google and Craigslist, Politico said.

Do Not Track

Do Not Track, as the December hearing indicates, is top of the agenda for many in Congress. It would allow consumers to opt out of having their web activities tracked for advertising purposes. It is a concept that has gained surprising momentum - surprising, given the gridlock that otherwise exists on Capitol Hill - and could well be proposed as legislation in the upcoming session. Most likely it would be incorporated into a larger bill on privacy. Certainly privacy advocates will continue their focus on the issue.

Earlier this year Consumer Watchdog, a privacy advocacy group, developed a 15-second spot that ran on a 540-square foot digital billboard in Times Square, twice an hour, for 45 days. The spot promotes a longer video the group produced. Both videos are controversial - and designed to push Do Not Track legislation. Titled "Don't Be Evil?" the avatar-style animation features Schmidt driving an ice cream truck and secretly spying on children.

Then there is the Federal Trade Commission. FTC Chairman Jon Leibowitz told a Senate panel earlier this year that the commission is exploring the idea as well (via Nextgov).

The opt-out process could be run by the FTC or some private sector entity, he suggested.

80% Approve of Do Not Track

These ideas have the backing of a majority of Americans, at least according to a poll commissioned by Consumer Watchdog. Conducted by Grove Insight in July, the poll found that 80% of Americans surveyed support a 'Do Not Track Me' list and 90% said that it is important to "have more laws that protect privacy of your personal information" online.

Complicating Factors

The forces lining up - or protesting against - these proposals are not uniform. While most privacy advocates support them there are surprising conflicts within the government as to how far, or if at all, a do not track legislation should reach.

The Obama Administration, via its Commerce Department, is said to favor a more lenient self-regulated approach. (via New York Times). Other agencies, such as the Federal Trade Commission, are leaning toward a stricter standard that would include the do not track option. "There is going to be a lot of confusion over the competing proposals and which version Congress and the American people should pay attention to," said Jeffrey Chester, executive director of the Center for Digital Democracy, a consumer advocacy group. (via the Times).

Anything Google and Facebook

Investigations into Google and Facebook are sure to continue, from one of any angles ranging from privacy to anti-trust. Facebook, in particular, has been the focus of a series of withering profiles in the Wall Street Journal that looked at its advertising practices and alleged privacy violations. After one article ran - one that examined the information transmitted to third parties from Facebook apps - Two House members asked Facebook for more details.

The Journal reported apps were transmitting identification numbers for users and their friends to dozens of advertising and Internet tracking companies. These numbers could be used to access a user's real name and tie it to their activity inside the apps. The lawmakers wanted to know how many users had been affected by the breach, when Facebook became aware of it, and what changes the site plans to deal with the problem, among other questions.

Google, given its size - Apple for that matter as well - is subjected to intense scrutiny for any acquisition it wants to make. It also has the recipient of a global multi-jurisdiction investigation into its street-mapping service. The FCC, clearly not a branch of Congress, has indicated it is continuing to investigate whether Google broke any federal laws when it collected users' personal information. However its actions will still resonate on the Hill as key members in both parties have said they will factor in Google's Street View data collection mishap when they consider privacy legislation. (via Wired).

Some Pharma Guidelines …Eventually?

Other issues of concern to marketers will likely receive some attention from Congress or the Administration in the next term. The Food and Drug Administration has promised to put forth clearer guidelines on pharma online marketing. The ones issued far, though, have provided guidance that is mixed at best, despite the three-day conference it held on the subject earlier this year.

Recently, for instance, the FDA told Novartis Pharmaceuticals that a Facebook Share button it used to promote a cancer-fighting drug violated its requirements to disclose side effects or risks about such medications. The letter only partly clarified the FDA's current thinking on social media, according to health-care marketing agency Digitas Health. (via the Wall Street Journal). For instance, it said in a client note, it appears that FDA was targeting the Novartis' content - and not the user-generated comments.

The Facebook widget is one of a handful of cautious attempts on the part of pharma companies to advertise their products online again after last year when FDA's Division of Drug Marketing, Advertising and Communications sent notices to 14 major pharmaceutical manufacturers informing them that their sponsored link ads were misleading because they did not adequately inform consumers about the drugs' associated risks. The result was a significant decrease in the use of sponsored ads by pharma companies.

The FDA is not deaf to pharmaceutical companies' requests for stronger guidelines. The agency has said it is hopeful it will have rules on the so-called "one-click" question by the end of the year. One-click refers to making disclosure about a drug's side-effects available one-click away. Maybe it will, maybe it won't. FDA Week recently noted that 15 years ago, FDA promised rules for Internet communications were "imminent," for which we are still waiting.

Radio on Smartphones

The National Association of Broadcasters put forth a plan earlier this year in which radio stations would give up their exemption for license fees for the music they play - shelling out on average $100 million a year. In exchange, one of the perks NAB is asking for is a government mandate that would force cell phone manufacturers to offer FM radio on their devices. It is a tricky, multi-layered proposal that must be passed by Congress and unlike the privacy and do not track legislation, this issue is not in the forefront in many consumers’ minds. But the benefits to radio stations are clear - they get a shot at the ever-increasing number of cellphone and smartphone users - and can be counted on the keep up lobbying for the measure this upcoming session.

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