City of LA Must Stop Approving Digital Ad Contracts That Violate Privacy Laws, says Consumer Watchog

LOS ANGELES, Feb. 14, 2023 /PRNewswire/ -- Today Consumer Watchdog called on the city's new leadership to address a bus shelter contract approved by the City Council that tracks people's location via digital ads on our public sidewalks.

Consumer Watchdog wrote Mayor Bass, City Attorney Feldstein Soto and the Board of Public Works to review this contract and others for compliance with the state's new privacy law. Such digital ads track geolocation and are illegal under California's newly effective California Consumer Privacy Act (CCPA) unless the public has an opportunity to opt out. The city's contract with tech start-up Tranzito-Vector fails to protect people's privacy rights under the CCPA.

"The public deserves to know what will be done with personal data, and how it will be told of its new rights regarding opting out of data collection," said Justin Kloczko, tech and privacy advocate at Consumer Watchdog.

Read the letter here.

Through recent contract approvals and changes to the city's municipal code, the city has auctioned off the public right of way to the tech-advertising industry, which is keen to profit off our personal data. A change to the city's municipal code last Fall broadened the definition of outdoor advertising, allowing for an avalanche of digital ads that follow us on our streets.

In addition to the 700 digital ads that will be branded on Tranzito-Vector bus shelters across the city, a motion by the city council to contract with IKE Smart City to install digital kiosks on streets will also contain digital display advertising. The digital ads are in addition to the nearly 100 digital billboards coming to LA trains and highways approved by the Metropolitan Transportation Authority last month.

These digital display ads latch onto mobile phone location data and give valuable insights, such as where a person goes or does after seeing an ad. Advertisers want to know if someone looked up that product or streamed a certain show.

"These digital ads raise not only serious privacy concerns, but also appear to violate state law, and not many are talking about it," said Kloczko. "Data mining tech companies pretending to be mobility operators can't have our public sidewalks, especially if they are tracking our movements. At the very least, the city or company must explain how it will allow people to opt out of tracking," said Kloczko.

The city's 20-year, $232-million contract with Tranzito-Vector says the data can be monetized.

"The contractor may propose opportunities to monetize the data collected from the Elements, technologies and programs developed for STAP," according to the contract, which the city council approved 12 to 1. One of the lobbyists hired by Tranzito-Vector to push for the city contract was Rick Taylor of Dakota Communications, according to lobbying registrations filed with the city. Taylor was an advisor to then-city council member Paul Koretz, who voted to approve the Tranzito-Vector contract. That, at the very least, appears to be a conflict of interest. 

And according to the city's new Sidewalk Transportation Amenities Program (STAP), under which the contract for new bus stop shelters will be executed, the stated purposes for data collection include "allow advertising that utilizes location-based technologies that can activate or display mobile content to the public."

But under the CCPA, which took effect last month, geolocation falls under the category of "sensitive personal information" that a person has a right to stop from being collected or shared with third parties. The CCPA provides that such data shall not be collected unless notice is provided "at or before the point of collection." How the public will be noticed so it can opt out of such tracking is unclear at best.

The city's contract with Tranzito-Vector also says, "All data shall be rendered to the city at the city's discretion."

"There is also no discussion in the contract, at all, of what the city intends to do with the data for its own purposes," wrote Venskus & Associates, a law firm representing Citizens for a Better Los Angeles, in a letter to the city council.

"Who would agree to be tracked by a billboard if they were texted or noticed about it when the billboard identified their phone? Would advertisers really agree to tell people that they are being surreptitiously stalked by a billboard company?" said Kloczko. 

The bus shelter contact was approved under the guise of helping protect the city's most vulnerable population from global warming.

"Why do we need ads to have shelter?" said Kloczko. "We can have our shelter and our privacy too."

"The CCPA empowers consumers to preserve privacy by exercising control over data that's become a personal extension of themselves," said Kloczko.

SOURCE Consumer Watchdog