Federal government’s “commercial surveillance” crusade to increase inflation says Internet for Growth coalition

Internet for Growth – a coalition of small businesses and creators who depend on digital advertising to reach customers and audiences – filed a letter with the Federal Trade Commission (FTC) expressing members’ strong opposition to the FTC’s Advanced Notice of Proposed Rulemaking on Commercial Surveillance and Data Security. Representing a nationwide digital advertising coalition, over 90 entrepreneurs and community leaders warn the Commission’s regulatory agenda could have a devastating impact on small businesses, their customers, online commerce, and competition.

Drew Ament, owner of the digital marketing firm Press1toTalk, said, “Targeted, data-driven advertising is a great equalizer, allowing entrepreneurs to enter the market and compete for customers in ways that wouldn’t have been possible a few decades ago. But the FTC’s proposed rulemaking process would take a regulatory sledgehammer to these digital advertising tools. That’s bad news for small businesses – and for competition itself.”

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“Digital ads help us reach consumers efficiently and cost-effectively,” says Brandy Miller, founder of Miller Girls Dog Walking Service. “The FTC’s proposed rulemaking would scramble an important resource at a time when the economy is in a fragile place. As a business-owner, we’ve been beset by what feels like never-ending challenges over the past few years. The FTC, and federal government as a whole, should dedicate resources to helping businesses, not hurting them.”

According to Internet for Growth’s letter to the FTC, “Small businesses have suffered immensely over the past few years due to the twin challenges of COVID-19 and surging inflation. But some of the proposed changes could gut the effectiveness and efficiency of digital advertising, forcing small businesses to spend much more on advertising just to maintain the same results. Those increased costs and likely loss of customers could be devastating for many small businesses – and the millions of Americans they employ.”

Data-driven digital advertising is the economic foundation supporting huge swaths of the free and open internet – as well as a critical lifeline for millions of small businesses and creators. Recent surveys indicate consumers prefer seeing tailored, personalized ads and offers compared to generic or less relevant alternatives. Data shows that small businesses that use targeted ads are 16% more likely to report positive sales growth than those who do not.

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Internet for Growth’s Executive Director Brendan Thomas explained, “Digital advertising is a vital tool for small businesses. The FTC’s misguided attempt to ‘protect’ them would instead strip startups and mom-and-pop entrepreneurs of the tools they use to reach customers inexpensively and compete against big firms, the only ones who stand to gain from heavy restrictions on data. Raising costs on businesses already reeling from the pandemic, supply chain problems, and inflation would be cruel and unusual punishment. It’s hard to understand why the FTC would be embarking on this quest to remake the entire economy, now or ever. But it’s not apparent from its description of the internet as ‘commercial surveillance’ that the FTC sees any benefit in the technology.”

Internet for Growth is urging the FTC to support economic growth, innovation, and creativity, and to avoid injecting further uncertainty as businesses face mounting challenges. The coalition is pushing for a federal privacy law to overcome a complex web of state regulations and federal overreach.