After violating a court order barring the government from regulating the internet without Congressional approval, the Obama administration is back at it taking a government-knows-best approach this time to regulating advertising.
The Federal Trade Commission is trying to hamper the ability of consumers to find relevant advertisements by pushing a “do-not-track” proposal.
Internet advertisments sometimes contain cookies that track consumers’ interests in order to present relevant advertising. For example, while searching for information about movies, you might find ads for a specific genre of films that you like rather than just general movie information. Its similar to Netflix where Netflix offers you recommendations based on what you previously rented and similar to a brick-and-mortal store where you can ask the clerk or salesperson for recommendations based on your interests.
The FTC staff thinks that having advertisements shown relating to your relevant interests might violate your privacy. That said, their proposal does not actually solve this non-existent problem. Their proposal is to require that web browsers give you an “opt-out” option on cookies. In order to opt-out, all anyone has to do is go to “Preferences…” and “Privacy” on your browser’s options menu and change his or her cookie settings. That option already exists. Once again, the free-market is shown to have found a much better and faster solution than the government did.
Nonetheless, this pattern of behavior by Obama administration bureaucracies is a continuing incompetent burden to e-commerce. In 2009, the Food and Drug Administration required that pharmaceutical companies include warnings about their side effects in their Google text advertisements.
Google text ads–those in the sidebar of Google’s search results–contain 95 characters, so they cannot contain large amounts of information. When clicked, they lead to a landing page that contains information about the product. Drug companies were already complying with the requirement to address side effects and safety information on their landing page for all consumers to see. The FDA wanted them to include safety information in the text of their ads where it wouldn’t fit and no one would see it.
The result was that an informative ads had to be changed such that consumers did not even know what the ads were advertising, making it harder for consumers to find relief for their ailments.
For example, one ad for Singulair allergy relief was changed from:
to:
If the government continues pushing further against advertising, the only effect will be that consumer spending will decline, businesses will have less sales, and independent website owners might not be able to maintain their websites without advertising revenue. To combat declining revenue, website owners might have to stick more ads on their page, hurting the consumers with more ads and less relevance. Governmental agencies with no skin in the game always have a way of not forseeing the consequences of their actions.
