WASHINGTON, D.C. — U.S. Senator John Thune (R-SD), Ranking Member of the Senate Committee on Commerce, Science, and Transportation, delivered the following prepared remarks at today’s “A Status Update on the Development of Voluntary Do-Not-Track Standards” hearing:
Thank you, Mr. Chairman, for holding this hearing as the Committee discusses and evaluates consumer habits in the digital online economy. Thank you also to all of the witnesses for being here today to provide testimony.
Online commerce and Internet use are a substantial and growing part of our overall economy and everyday lives. According to the research firm eMarketer, nearly 150 million Americans were “digital buyers” in 2012, collectively spending more than $340 billion online. To court this growing consumer base, more than $37 billion was spent last year on digital advertising.
As large as the online market already is, estimates for coming years predict continued growth. Both digital advertising and consumer spending are projected to grow by more than 50 percent by 2016, when 25 million more Americans are expected to be digital consumers.
The growing digital advertising industry provides thousands of small web publishers, the so-called “long tail” of the market, with the revenue they need to maintain their online presence. Contextual advertising—like an ad for running shoes on a website catering to runners— and general display ads make sense for some websites, but don’t necessarily make sense for all websites. The market has responded by developing new and innovative ways to deliver relevant ads and content to Internet users, but this has raised questions about consumer expectations and privacy. It is my hope that today’s hearing will be a thoughtful discussion on how we can provide consumers with greater choice of services and products, as well as increased confidence that their Internet experiences will be safe.
Federal Trade Commission Chairman Ramirez recently gave a speech to the American Advertising Federation, in which she said that “an online advertising system that breeds consumer discomfort is not a foundation for sustained growth.” I agree, and it is precisely because of that dynamic that I believe web publishers, browsers, social networks, data analysts, and advertisers have an incentive to develop their practices to meet the evolving interests of consumers.
I am interested to learn how efforts to regulate and legislate the intricacies of online commercial activity could impact the digital space. Will efforts to impose Do-Not-Track rules better protect consumers and grow online commerce? Or, are there situations where they might diminish consumer privacy, inhibit consumer choice, or raise barriers to entry for new competitors in the online market? The largest browsers and publishers have the means to adapt and survive in any environment, but smaller online companies and the choices they provide for consumers may not.
I have faith that consumers armed with knowledge will take the time to make informed decisions in their own best interests. Consumers expect and seek more transparency, understanding, and control as they increasingly interact with online resources. And the market is responding. New tools are being presented and refined in response to consumers’ expectations. This spurs growth and innovation, which benefits both consumers and producers.
I am interested in our witnesses’ views on the dynamic Internet ecosystem, and the status of industry-developed standards for online conduct. Thank you all and I look forward to hearing your testimony.