Panel hears search engine maintains profits while limiting targeted advertising: Broadband Breakfast

WASHINGTON, March 2, 2022 — The House Consumer Protection Subcommittee heard Tuesday from a search engine company that said it was successful in maintaining a profitable business model while limiting the reach of its targeted ads.

The committee was discussing the Surveillance Advertising Ban Act of 2022 – a bill sponsored by the senator. Cory BookerDN.J., and introduced in January 2022 – which would ban “surveillance” advertising used by large tech platforms that passively collect user data to build a profile, but are not readily available to the user.

The legislation, however, would still allow limited contextual targeted advertising, which is specifically tailored to what the user is viewing at the time.

“Virtual advertisements are based on the content displayed on the screen and don’t even know anything about you,” a witness said. Katie McInnispublic policy manager at DuckDuckGo, a search engine that puts consumer privacy first.

“So if you go to DuckDuckGo and do a search – let’s say you’re looking for mobile phones – we’re going to show you ads for phones. It’s as simple as that,” she said, adding that it is much less invasive than so-called behavioral advertising.

“Behavioral advertising, on the other hand, is based on personal profiles from data collected both online and offline about you,” McInnis said. “It’s surveillance advertising. And rather than finding these ads helpful, a majority of Americans say it’s an inappropriate use of their data. And that’s no surprise as a massive breach of their privacy and data collection expectations,” she said.

The company says it makes money

To pass such a bill, lawmakers would need to know what kind of monetary impact it would have on companies that rely on advertising models.

Jan SchakowskiD-Ill., asked if the search engine has been able to remain profitable despite the limited reach of its advertising model.

“Yeah, we’re very profitable,” McInnes replied. “Our revenue is about $100 million a year, we have over 30 million American users in the United States, and they span the country and the political spectrum.”

representing Tony CardenasD-Calif., said he would dare to guess that $100 million “is a slow day for Facebook,” adding, “I pray that DuckDuckGo can actually continue to be successful in this environment because we’re talking about companies that [have a] net worth of a trillion dollars or more and the reason I point this out is because they choose not to use good practices. They choose not to have practices that respect other people who use their platforms.

McInnis said if the Surveillance Advertising Act is passed, it will allow other companies to compete more meaningfully and contribute to a healthier online ecosystem overall.

“If this bill were enacted, many companies would be prevented from collecting data online, which would mean that the duopoly and ads of Facebook and Google would be diminished,” she said. “Companies would be able to compete with them more forcefully in the market, and we would have more innovative contextual advertising services for users, and therefore advertisements will be more relevant and useful to users in the future.”