CFPB Issues Interpretive Rule Saying Big Tech Digital Marketers Can be Held Liable for Unfair and Deceptive Practices
Earlier this month, the Consumer Financial Protection Bureau (CFPB) issued an interpretive rule warning that digital marketing providers must comply with federal consumer finance protections.
In a press release announcing the rule, the Bureau said that “digital marketers that are involved in the identification or selection of prospective customers or the selection or placement of content to affect consumer behavior are typically service providers for purposes of the law. Digital marketers acting as service providers can be held liable by the CFPB or other law enforcers for committing unfair, deceptive, or abusive acts or practices as well as other consumer financial protection violations.”
“When Big Tech firms use sophisticated behavioral targeting techniques to market financial products, they must adhere to federal consumer financial protection laws,” CFPB Director Rohit Chopra said in the release. “Federal and state law enforcers can and should hold these firms accountable if they break the law.”
The rule clarifies that digital marketers provide material services to financial firms, as they are typically materially involved in the development of content strategy when they identify or select prospective customers or select or place content in order to encourage customer engagement. Because digital marketers are not merely providing ad space and time, they do not qualify under the “time or space” exception in which traditional advertisers merely offered ad time on radio and TV programs and newspapers would sell space on their pages.
In addition, the rule also makes clear that the Bureau, states, and other consumer protection enforcement bodies can sue digital marketers to stop violations of consumer financial protection laws. This means that service providers can be held liable for unfair, deceptive, or abusive acts or practices under the Consumer Financial Protection Act.
Chopra also delivered remarks on the subject at the 2022 National Association of Attorneys General Presidential Summit.