Proposals affecting the marketing research industry: ChatGPT, noncompete disclosures and more
The Insights Association (IA) focuses on protecting the insights and analytics industry from judicial, legislative and regulatory bodies. It works with national and international associations and advocates for the ability to collect, analyze and share data for the purposes of market research and data analysis.
The insights industry continues to face the proposals made in late 2022 and early 2023. The continued legal proposals revolve around consumer privacy, data security, generative AI and more.
Data security and consumer privacy: Generative AI, state, federal and Congress proposals
Artificial intelligence in the insights industry
As artificial intelligence tools and services continue to be introduced, regulators and legislators are beginning to implement and propose rules and restrictions. The April Fighting for You column emphasizes the importance of understanding the potential risk of using generative AI tools.
Recently, four federal government agencies partnered to alert others about the potential bias and discrimination within automated systems and artificial intelligence. According to the May column, the White House’s interest in AI regulation could lead to restrictions in the marketing research and insights industry and its interactions with individuals who receive incentives for their research participation.
IA’s Fighting for You author Howard Fienberg also mentioned Rhode Island’s legislation, saying it would “regulate generative artificial intelligence models, such as ChatGPT, in order to protect the public’s safety, privacy and intellectual property rights.”
State legislation proposals
IA called for clarifications regarding the Colorado Privacy Act, which goes into effect on July 1, 2023. According to the article, “Clarifications from Colorado Attorney General would ease insights industry compliance with Colorado Privacy Act,” the Colorado Privacy Act “adds consumer privacy rights, requires privacy notices, opt in to process sensitive data, data protection assessments from high-risk processing activities and data processing agreements, among other things.” IA asked that the “targeted advertising” definition be clarified as it would affect independent audience measurement and internal first-party audience measurement for all content, not only advertising.
According to the April column, the approved rules regarding the California Privacy Rights Act (CPRA) led to the California Chamber of Commerce to file a lawsuit to delay any enforcement for a minimum of a year. In the article, “IA comments on risk and cybersecurity in new California rulemaking process,” Fienberg says that the insights industry raised concerns over a new round of rules revolving around risk assessments, automated decision-making and cybersecurity audits, all of which were overlooked in the initial rule making. IA’s comments include, “In determining what processing presents a ‘significant risk’ to consumers’ privacy or security use a clearer, more concise approach than the European Data Protection Board’s Guidelines on Data Protection Impact Assessment” and “Limit the cybersecurity audit and risk assessment requirements to firms that meet one of the first two prongs of the CCPA’s ‘business’ definition.”
The Utah Social Media Regulation Act, which restricts the use and access of social media platforms to residents under the age of 18, was signed on March 23. Similarly, a bill in Louisiana also aims to restrict access and use of social platforms to residents under the age of 16.
Federal and Congress legislation proposals
The April column mentions the Data Care Act, a federal proposal with reportedly vague requirements that “would require insights providers and departments to ‘fulfill the duties of care, loyalty and confidentiality’ for consumer data online.” The column also touched on the Consumer Protection and Due Process Act that would allow the Federal Trade Commission to “bring enforcement actions against frauds and scams, with proper safeguards.”
The NTIA Policy and Cybersecurity Coordination Act recently passed by a House committee. Fienberg says the legislation would “insert an oft-forgotten agency within the U.S. Department of Commerce into U.S. consumer data privacy and security regulation.”
Research subjects as independent contractors
More federal proposals have been made regarding research subjects as independent contractors. The Protecting the Right to Organize Act and the Guaranteeing Independent Growth Act (GIG Act) have been introduced. Fienberg says, “neither looks very good for the continued treatment of research subjects as independent contractors when they receive participant incentives.”
The Protecting the Right to Organize Act could result in research subjects who receive incentives to be treated as insight company employees and would be subject to being organized into a union. Meanwhile, per the March column, the GIG Act would “codify the Trump Administration’s labor rules on independent contractor status.”
In the May column, Fienberg says the New York Freelance Isn't Free Act would “add new paperwork requirements and extensive liability for the use of participant incentives for some of the most highly compensated research subjects.”
Banning noncompete disclosures
In April, the Insights Association agreed that there should be restrictions in employee contracts regarding noncompete agreements but suggested that the Federal Trade Commission should revise what restrictions should look like and how they should be achieved. Since then, New York advanced a bill that would ban most noncompete agreements including some trade secret protections and nonsolicitation agreements.
Maryland’s Stop the Spam Calls Act
A new Maryland law was signed into effect in May. Fienberg says the Stop the Spam Calls Act will “require prior express written consent for many market research or polling phone calls and texts to a Maryland resident or area code, among other requirements and restrictions.”
The Ask U.S. Panel project
The article, “Inspector general scolds the Ask U.S. Panel project at Census Bureau as the Bureau plans to insource,” covers the Census Bureau’s attempt to develop an online research panel that would compete with the insights industry. The Office of the Inspector General (IG) for the U.S. Commerce Department argued that the Bureau lacked transparency and was “providing significant taxpayer dollars to a private entity ‘without validating processes.’”
In response, Fienberg says, “The IG report effectively scolded the Ask U.S. Panel project as a waste of taxpayer money in multiple fashions, including that the Census Bureau never bothered to check if the research services they were trying to expensively develop from scratch could have been affordably sourced from the private market. In fact, multiple private insights companies and organizations already provide these services, including to the federal government.”
Per the article, the Census Bureau terminated the “cooperative agreement” and the panel was not further developed, however Feinberg says, “We remain worried that the Census Bureau still intends to use taxpayer dollars … to develop a service that already exists in the private market. The Bureau’s attempt to fund a private entity to learn how to build a probability-based online research panel failed … since it is a specialized area of expertise.”
The future of the marketing research industry
The industry will continue to face more privacy and data proposals and changes. As more legislations continue to be made and clarified, it is important for researchers to understand what they could mean for the industry and for marketing research processes.
The information included in this article is not intended and should not be construed as or substituted for legal advice. It is provided for informational purposes only. It is advisable to consult with private counsel on the precise scope and interpretation of any laws/regulation/legislation and their impact on your particular business.