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Mobile’s dirty little data secret under Washington’s microscope

Under close inspection: Washington lawmakers have their eye on bidstream data.

Congress and the FCC have asked AT&T, Mobilewalla and Verizon about a common-yet-secretive industry practice they call surveillance: the siphoning of bidstream data. Now the Interactive Advertising Bureau is busier than ever on Capitol Hill, bracing for a possible Democratic turnover in the Senate which could turn up the heat on this and other practices within the ad industry.

Amid heightened scrutiny over digital data usage, lawmakers and regulators want details of a common-yet-secretive industry practice they call surveillance: the siphoning of bidstream data.

The top lobbyist from the digital ad industry’s most powerful trade group says he is in more contact than ever over the last couple of months regarding the issue with legislative staffers on Capitol Hill.

The Interactive Advertising Bureau’s communications with federal lawmakers “have now been ratcheted up a hundred times more than even two months ago,” says Dave Grimaldi, executive vice-president, public policy at the IAB.

Bidstream data gives advertisers who bid on ad space through real-time exchanges information about who would be reached with a targeted ad. It might include demographic data or information about someone’s interests. In the mobile ad environment, it can include latitudinal and longitudinal coordinates or more precise locations.

Data points from the bidstream can be extracted by any of the countless ad tech and data firms that participate in a bid – not only the bid winner. Companies suck up data from the bidstream to produce other data products, or to package and sell to targetable audiences. People in the market to buy a car or a new phone, for example.

However, lawmakers worry it is sometimes used in ways that violate privacy and enable deceptive business activity.

Grimaldi says the IAB’s public policy council members have helped explain to lawmakers how bidstream data is used in the ad exchange process. There are no industry standards or rules established by the IAB or Mobile Marketing Association against the practice, though it is frowned upon, in part because it stretches the meaning of consumer consent for data use.

Mobilewalla’s ‘outrageous’ BLM analysis backfires

Concerns heated up in June when mobile data firm Mobilewalla, an IAB member, announced in a press release that it had analyzed ethnicity, age and geographic information associated with Black Lives Matter protestors. The company’s CEO said the location data analysis provided “a better understanding of the impact of this historic protest.”

But lawmakers called it surveillance. “Few Americans realize that companies are siphoning off and storing that ‘bidstream’ data to compile exhaustive dossiers about them,” wrote a bipartisan group of legislators including Senator Ron Wyden (D-OR) in a July letter asking the Federal Trade Commission to determine whether ad tech data practices violate the FTC act.

Their request spotlighted Mobilewalla’s analysis of BLM protestors as an example of how bidstream data is used “in outrageous ways that violate Americans’ privacy.”

The FTC won’t say whether it is probing bidstream data gathering, but its chairman did respond to lawmakers. “In order to fully address the concerns mentioned in your letter,” wrote FTC Chairman Joseph Simons in a letter to Wyden obtained by The Drum, “we need a new federal privacy law, enforceable by the FTC, that gives us authority to seek civil penalties for first-time violations and jurisdiction over non-profits and common carriers.”

In questions sent separately to Mobilewalla, Senator Elizabeth Warren (D-MA) and other legislators asked the company to provide details of its “disturbing” use of bidstream data.

“Mobilewalla has and will respond to any request received from Congress or the FTC,” a Mobilewalla spokesperson tells The Drum, declining to provide further detail.

Federal Communications Commission Chairman Geoffrey Starks also wants to know how location data from AT&T and Verizon winds its way through the bidstream, and in August he sent the telcos an inquiry about it. AT&T and Verizon did not respond to a request to comment for this story.

Avoiding the dirty little secrets: As lawmakers and regulators scrutinize the data fueling the digital ad industry, marketers should ask their ad tech partners how the information that enables their advertising might be used down the road.

Bidstream siphoning accepted but downplayed

Like other data providers that use bidstream data, Mobilewalla concocts consumer audience insights by blending a cocktail of information it gets from mostly-unnamed app publishers, data aggregators and other suppliers.

It is not known whether bidstream data was used by Mobilewalla in its analysis of protestors. However, Mobilewalla told The Drum approximately 5% of its data is derived from bidstreams.

Ad tech firms and data providers downplay their use of bidstream data. For example, when David Staas, president of mobile data firm NinthDecimal described the firm’s data sources to GeoMarketing, he said, “The vast majority of NinthDecimal’s data is non-bid stream data.”

To some publishers, using bidstream data for purposes beyond serving an ad feels a lot like stealing. BPA Worldwide, which runs a programmatic media exchange, is trying to raise awareness among its B2B publishing members. “We started to realize what potentially could be happening in the bidstream and how the data could be captured by someone with no intention to advertise [but instead to] repurpose that data in a derivative work,” says Glenn Hansen, CEO of BPA Worldwide.

Bracing for Democratic control

Currently, the IAB is among industry and civil liberties groups evaluating a draft of Wyden’s Fourth Amendment is Not For Sale Act. It would prevent the government from buying or acquiring Americans’ personal information – which could include location information derived through the bidstream – if the government would otherwise need a court order to obtain it. “We are continuing to finalize details,” says a spokesperson from Wyden’s office.

Another common source of location data used by ad tech and data firms, mobile app Software Development Kits (SDKs), is under the microscope, too.

“We’ve been told by a number of senior congressional staff that the black box behind SDKs is truly a source of great curiosity and concern,” says the IAB’s Grimaldi.

If Democrats win control of the Senate, it could turn up the heat on bidstream siphoning even more, says Grimaldi. The IAB hopes to influence comprehensive federal privacy legislation which is likely to come sooner if there’s a leadership changeover.

Says Grimaldi, “It’s is going to whipsaw back around where you are going to have multiple hearings a week.”

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