Many have wondered whether the recent focus on data privacy within advertising will continue. We expect that trend to continue in light of the pace of change which has made compliance a moving target in terms of what regulators consider sufficient.
With that in mind and Data Privacy Day 2023 now here, I wanted to talk about which privacy trends you should keep an eye on in 2023.
4 Data Privacy Trends to Watch for 2023
State Laws Will Drive Compliance Needs
The alphabet soup of state privacy legislation in the U.S. will continue to expand. Beyond new states entering the fray, several states with existing privacy laws may pass more detailed legislation or specific regulations on specific topics, like our friends in California.
Without a comprehensive federal privacy law in place, state regulators are at the steering wheel, influencing how companies contract, execute campaigns and interact with consumers, customers, partners, and even employees.
Scrutiny Will Increase Over the Use of Children, Health, and Location Data
In addition to substantial new legislative activity, we will almost certainly see enforcement actions at both the state and federal levels focused on children, health, and location data. Campaigns and products using these types of data should be among the first you review in 2023.
Focus on these data types stems from direct legislative efforts and impact of changing reproductive laws resulting in health and location data being under the microscope. The White House and Federal Trade Commission stepped up efforts to protect health and location data in 2022, and they’re both expected to further ramp up policymaking and enforcement in those areas this year.
Thankfully, there are resources to help you manage your collection and use of sensitive data. Leading companies who offer location data-related services adopted NAI’s Precise Location Information Solution Provider Voluntary Enhanced Standards which provides a road map to placing sensible restrictions on the use, sale, or transfer of location data correlating to Sensitive Points of Interest.
Renewed Focus on Algorithmic Bias
In addition to focusing on specific kinds of data, 2023 will be a year that sees Artificial Intelligence (AI) systems and algorithms scrutinized in more detail, both by states and by federal regulators across multiple agencies.
On January 18, the National Telecommunications and Information Administration announced an inquiry into how data practices affect civil rights. Companies should review their AI systems routinely, and ensure they are integrated into privacy reviews.
Guard rails for reviewing and testing training data and outcomes to ensure fairness and avoid unlawful discrimination should be implemented. Failing to do so can result in enforcement actions by the FTC, bring hefty fines and orders to destroy not only the underlying data but also associated models, algorithms, products, and services.
Expectations for Consumer Choice Are Changing
So, how can you ensure the data you collect and receive satisfies 2023 standards? Start with evaluating how you communicate with consumers and what choices you provide for how data is used.
The way advertisements and platforms manage notice and choice for consumers will change this year. This transition is fueled both by technological changes at platforms as the slow death march of cookies continues and by regulatory and activist pressures, including the proliferation of browser-based controls.
This year, new methods of providing and honoring consumer rights will be more visible to consumers and require greater cooperation among advertisers, publishers, and ad tech companies to implement. The placement of notice and choice will be critical — but so will be how and what you say to consumers.
The FTC has focused for the past two years on dark patterns, but 2023 brings California and Colorado’s laws and regulations prohibiting dark patterns into force as well. When you review your disclosures for clarity, you should also step back and ensure the user experience should avoid deceptive, misleading practices in the notice and choice process.
In my own personal life, I have seen recent enforcement actions against reputable brands where it is clear that certain practices in advertising campaigns that may have once seemed permissible are no longer acceptable. It will be key for companies to ensure training and awareness occurs across their organization from legal and engineering to marketing and sales to ensure dark patterns are not used.
To better understand common “watch-outs,” about what regulators are looking for, take a look at the FTC report Bringing Dark Patterns to Light and NAI’s Best Practices for User Choice and Transparency.
Even though it sometimes feels like everything is up in the air when it comes to privacy compliance, taking these trends to heart will help advertisers, publishers and ad tech companies build strong compliance strategies.