In the two years since Lina Kahn was appointed as Chair of the Federal Trade Commission (FTC) the agency has redoubled its efforts to curb illegal robocalls and telemarketing practices, a crusade that has resulted in numerous high-profile enforcement actions. The agency is now turning its focus on three additional areas in digital marketing that have recently manifested as potentially serious concerns: pixel tracking, misleading designs in consumer interfaces (aka “dark patterns”), and artificial intelligence.
Companies engaged in any of these activities should carefully review their practices to ensure they are following the law, as the FTC is ready, willing, and able to take swift action against any who violate the regulations that apply to these areas.
Tracking Pixels in Digital Marketing
Earlier this year, the FTC launched an aggressive pixel tracking enforcement program. Tracking pixels are used by countless companies for collecting consumer data online. Once nothing more than tiny, pixel-sized images inserted into web pages, tracking pixels have evolved to include a broad range of sophisticated HTML and JavaScript code embedded in websites email. Often hidden from view, tracking pixels can be used to track and send an enormous array of personal data, including specific items a consumer has purchased or information they may have typed within a form.
Tracking pixels are commonly used to track consumer behavior online for the purpose of targeting ads to consumers who may be more likely to engage with an advertiser or purchase something based on their previous online activities. However, these miniscule programs present hefty privacy concerns, especially when they facilitate the sharing of sensitive health-related data with social media and advertising platforms.
The FTC’s blog posts offer strong hints that the agency will be increasing their enforcement efforts in this area. Companies that use tracking pixels are encouraged to be transparent, explain the use and purpose of these tools to website visitors, and to offer options for those who want to opt out from being tracked.
Dark Patterns in Digital Marketing
Certain elements incorporated into websites have the tendency to mislead consumers. When that effect is deliberate, the FTC views them as "dark patterns" employed to trick consumers to undertake actions, such as making or upgrading a purchase, that they would not have otherwise chosen to undertake.
The FTC has indicated on multiple occasions that dark patterns represent a serious problem that needs to be fixed and has made it clear that it intends to act against those companies employing them to protect the right of consumers to make clear choices.
To avoid becoming a poster child for dark pattern enforcement, the agency has encouraged companies investigate complaints from consumers, identify any misleading designs, and correct them to be clearer and more honest and so make the digital space fairer and more transparent for everyone.
Artificial Intelligence in Digital Marketing
The FTC will also keep a close eye on the complex field of Artificial Intelligence (AI), where the burgeoning technology can supercharge the effectiveness of ordinary scams and presents a host of ethical concerns even when used for legitimate purposes. AI, with its many aspects like machine learning and automated decision-making, reflects our society, and the FTC wants to make sure it doesn't promote unfairness or discrimination.
The agency has cautioned companies that work with AI to be responsible and transparent. They want to ensure that when companies claim their AI is reliable and safe, those claims are true. This warning serves to make sure that promises of user-friendly AI are genuine, privacy assurances are solid, and the AI systems are free from bias or prejudice.
Conclusion
As consumer interactions move into new and uncharted spaces, the FTC is focusing its efforts on protecting consumer privacy and choice. While individual states create their own set of privacy laws, the FTC is working to create a national framework for consumer privacy at the federal level by applying the FTC Act’s prohibition against unfair and deceptive practices to new technologies.
As the FTC navigates the challenges of modern digital interaction with a focus on consumer protection, it calls on companies to do the same by tackling the potential harms generated through pixel tracking, dark patterns, and AI through transparency, ethics, and compliance.
