Google, Facebook advertising models under fire in house privacy proposal

Bloomberg

Alphabet Inc’s Google and Facebook Inc would face limits on the online tracking and data sharing that power their advertising businesses under a bipartisan House proposal to establish the nation’s first federal privacy law.
The draft legislation from the House Energy & Commerce Committee, which oversees online privacy issues, could diminish companies’ ability to monitor users across the web and require them to get permission to share their customers’ data with others. It would also allow consumers to opt out of receiving advertising from companies with which they already have relationships.
The measure comes as giant technology companies are coming under pressure in Washington on multiple fronts, including antitrust scrutiny, outrage over their lack of control over content on their platforms and allegations that they are biased against conservative ideas.
If passed, the measure could become one of the biggest challenges to their crown jewels — in-depth knowledge about their users — and a test of whether their lobbying clout can fend off the threat.
The prohibitions could gum up the gears of the vast ad-technology machinery that Google and Facebook have built. Taken together, those new responsibilities and others would make the proposal stronger than a strict new California law, said Republican Representative Cathy McMorris Rodgers of Washington State, who helped develop the text.
Companies are moving to comply with the California statute, which goes into effect January 1, but won’t be enforced until next July.
The limits in the proposal, which is the product of a year’s worth of discussion by lawmakers in both parties, could dent the profitability of practices that helped Google and Facebook establish their dominant position in the $330 billion digital ad market.
The companies not only monitor users on their own platforms, they also track consumers on millions of third-party sites. The practice often explains why people see ads for products they’ve looked at elsewhere, often within seconds.