Senate Judiciary Holds Hearing on Digital Advertising, Privacy, and Competition

By Jacqueline Yin, Project Disco

On May 21, 2019, the Senate Judiciary Committee held a hearing titled Understanding the Digital Advertising Ecosystem and the Impact of Data Privacy and Competition Policy. The hearing aimed to address the intersecting issues between online advertising, privacy, and competition in the digital economy. The witnesses included Professor Avi Goldfarb, Elison Professor of Marketing at the University of Toronto; Dr. Fiona M. Scott Morton, Professor of Economics at the Yale School of Management; Brian O’Kelley, Founder and Former CEO of AppNexus; Dr. Johnny Ryan, Chief Policy & Industry Relations Officer at Brave; and Jan M. Rybnicek, Counsel at Freshfields Bruckhaus Deringer.

Professor Goldfarb first discussed the significant trade-offs in balancing privacy with innovation. On one hand, consumers would have more privacy if data was not collected about them. However, companies collect data to innovate, resulting in the creation of better products for both end users and advertisers. Another trade-off Goldfarb considered was the balance between privacy and competition. He pointed out that despite the push for increased privacy regulation, this type of regulation has the potential to disproportionately burden new and small companies. Large companies generally have more resources to comply with regulation and often have access to large and valuable sets of data, while smaller firms typically do not. Goldfarb noted that regulations that restrict the flow of data across companies would therefore constrain smaller firms’ ability to compete. Senator Blackburn echoed that sentiment later in the hearing, and mentioned how a Tennessee company had to close operations in Europe due to the stringent standards of the GDPR.

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