Re: Accountable Tech Petition for Rulemaking to Prohibit Tailored Advertising (Comment to the Federal Trade Commission)

Abstract

This comment addresses Accountable Tech’s Petition asking the Federal Trade Commission (FTC) to initiate a rulemaking to prohibit tailored advertising (TA) as an unfair method of competition (UMC). We make five main points that cast serious doubt on the wisdom and viability of such a rulemaking. First, as a threshold matter, there are reasons to doubt that Congress has given the FTC the power to promulgate rules under its UMC authority. Second, the FTC can reach any use of TA that harms competition under its current authority. Third, given that a per se condemnation of TA would represent such a monumental departure from Sherman Act precedent, there are serious doubts that such an interpretation of the Commission’s UMC power would withstand judicial scrutiny under Chevron. Fourth, TA provides consumer benefits in terms of access to free content and services that far exceed the costs in lost privacy. Finally, any rule that would limit TA will have to pass First Amendment scrutiny.

Keywords: antitrust, competition law, consumer protection, Federal Trade Commission, online advertising, unfair method of competition, Chevron deference, First Amendment

JEL Classification: K2, K20, K21, K23