If the leaders of Big Tech platforms thought geopolitics would take the heat off their companies during Joe Biden’s first State of the Union address, they were mistaken. In a speech that covered plenty of ground, the president took time to scold social media companies for what he called “the national experiment they’re conducting on our children for profit.” Biden called on Congress “to strengthen privacy protections, ban targeted advertising to children, demand tech companies stop collecting personal data on our children.”
Though it was just a passing reference, Biden’s call to ban targeted advertising to children—which generated noticeable applause—was something of a milestone. Regulating targeted advertising was not even close to a mainstream idea until quite recently. Now it’s in the State of the Union.
Not long ago, the highest-profile example of federal lawmakers addressing online advertising was when Orrin Hatch asked Mark Zuckerberg, during the CEO’s first-ever appearance before Congress, how Facebook made money from a free product. Zuckerberg went viral for deadpanning: “Senator, we run ads.”
Hatch actually knew Facebook sold ads; he was feigning ignorance for rhetorical effect, as lawmakers often do during hearings. No matter. The exchange went viral as a supposed example of how out of touch Congress was when it came to technology. Facebook employees wore T-shirts with Zuckerberg’s phrase printed on them. Look at these old geezers: They don’t even know how social media companies make money. How will they ever regulate them?
As recently as two years ago, Congress hadn’t made much progress on that front. In a March 2020 piece titled, “Why Don’t We Just Ban Targeted Advertising?” I wrote about a small group of thinkers who were beginning to publicly attribute a litany of ills to the practice of tracking users to serve them personalized advertisements. Most obviously, this includes almost anything having to do with online privacy abuses. When a Catholic priest was fired for frequenting gay bars, for example, it was thanks to his employers using geotargeting data from Grindr that exists primarily to help target ads. But microtargeted advertising is also linked to other problems. It diverts ad revenue away from the organizations that create media content and toward the aggregator platforms that keep the most extensive files on users. And it arguably turbocharges the incentives of platforms like Facebook, Instagram, and YouTube to optimize relentlessly for user engagement.
But small was the operative word to describe that group of critics: a lawyer here, a professor there. There was little indication that they had made headway with the people who could actually effect change. Congress had spent two years arguing about what to do with Big Tech, particularly social media. But its members had paid vanishingly little attention to the business model that drives it.
That is no longer the case. Over the past year, lawmakers have started to zero in on the advertising model that sustains social media platforms, which is increasingly referred to as “surveillance advertising,” a term that captures not just the targeting, but the data-gathering that the targeting requires. (This is thanks in part to a push by an advocacy group called Ban Surveillance Advertising, which launched in March 2021.) “The problem’s with the business model,” said congressmember Kelly Armstrong (R-ND) at a hearing in December. “One that is designed to attract attention, collect, and analyze what keeps that attention, and place ads.” And so, he asked, “Should we restrict targeted advertising?” In January, House members Anna Eshoo (D-CA) and Jan Schakowsky (D-IL), along with Sen. Cory Booker (D-NJ), introduced the Banning Surveillance Advertising Act. That same month, Sen. Mike Lee (R-UT) introduced a bipartisan bill to regulate the online ad market more like the stock market, directly challenging Google’s current status as primary buyer, seller, and marketplace for targeted ads.
