WASHINGTON—In response to Rep. Anna Eshoo (D-CA), Rep. Jan Schakowsky (D-IL), and Sen. Cory Booker (D-NJ) introducing the “Banning Surveillance Advertising Act,” which would prohibit targeted online ads, the Information Technology and Innovation Foundation (ITIF) issued the following statement from ITIF Vice President Daniel Castro:
It is shocking to see a group of progressive leaders seriously propose banning targeted online ads given the significant harm it would cause many Americans who struggle to get by in today’s economy. If policymakers are worried about controlling inflation, then making it more expensive for businesses to advertise their goods and services is the wrong strategy.
Online advertising pays for the vast majority of free online services. Banning targeted ads would make online advertising much less effective, so advertisers will pay less for them and those who display ads—including app developers, media companies, and content creators—will earn significantly less revenue. Faced with a budget shortfall, many online services will have few options other than to either reduce the quality of their services or charge their users fees.
And while some wealthier households might be willing to pay for ad-free Internet services, millions of American families would be hurt by this policy as they find themselves cut off from key parts of the digital economy. Indeed, this policy would be equivalent to telling the millions of American households who watch ad-supported broadcast television that, to protect them from advertising, they will have to sign up for premium cable and streaming subscriptions instead.
Banning targeted ads would destroy a key pillar of the Internet economy. Moreover, it would be antithetical to the progressive agenda because it would leave many American families much worse off in terms of access to online content and services.
There are legitimate concerns about protecting consumer privacy online. To address these issues, legislators should continue to push for comprehensive federal privacy legislation that preempts states, protects consumers, and promotes innovation. But banning targeted ads should be off the table.
For more, see:
- “How Do Online Ads Work?” ITIF Technology Explainer, November 2, 2021.