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Illustration: Caresse Haaser, Rebecca Zisser/Axios

The Advertising Research Foundation will announce an initiative tomorrow to develop industry guidelines on consumer data privacy and protection. The move comes as regulators and consumers start to pay closer attention to data privacy and security in light of recent revelations about the abuse of user data on big tech platforms.

Why it matters: Obscure data practices have been used for years in the ad tech industry to monetize as much user data as possible. Efforts by industry groups and regulators to rein in those practices could have a significant impact on the way advertisers spend their marketing budgets online.

A recent eMarketer poll suggests that the percentage of ad spend that will go to Facebook and Google this year will decline.

  • Facebook and Google will capture 56.8% of the U.S. digital ad market this year, compared with 58.5% last year.
  • Meanwhile, several big brands, like Subway and Procter and Gamble, say they are pulling back ad dollars from some of the bigger tech platforms, in a move of defiance.

The shifts could signal that marketers are ready to move dollars from open platforms that rely mostly on user-generated content to companies with tighter content scrutiny, like Apple, Amazon and Snapchat.

The big picture: Marketers' efforts are happening in conjunction with moves by regulators to focus on data privacy and security.

The FTC confirmed Monday that it has an open non-public investigation into the privacy practices of Facebook.

  • While analysts don't think the body will fine Facebook out of business, it does put pressure on Facebook and its competitors to be transparent about any other data privacy abuses from the past and to comply with Europe's sweeping privacy regulations that take effect in May.

On Monday, the Senate Judiciary Committee became the third panel on Capitol Hill to ask Facebook CEO Mark Zuckerberg to testify in front of Congress, following in the footsteps of calls from the House Energy and Commerce Committee and the Senate Commerce Commitee last week. Lawmakers are calling on the CEO's of Google and Twitter to testify before Congress on April 10, as well as Mark Zuckerberg.

  • Meanwhile, regulators in Europe, which have historically taken the lead on these issues, have suggested that the EU was considering breaking up Google. "We are not there yet but it is important to keep an awakened eye," EU Competition Commissioner Margrethe Vestager told The Daily Telegraph Monday.

Investor and consumer confidence is plunging in wake of the scandals.

  • Facebook stock hit its lowest point since July 2017 yesterday in light of the investigation announcement. Scandals surrounding data privacy have dragged the stocks of other social media companies, like Google, Snapchat and Twitter, down with it.
  • Facebook's favorability has dropped in the last five months, falling twice as far as the other tech giants, according to an exclusive poll for Axios by SurveyMonkey. Favorability towards Google, Twitter, Amazon and Apple have also decreased.
  • Only about four out of 10 Americans (41%) trust Facebook to comply with U.S. privacy laws, according to a Reuters/Ipsos poll released on Sunday.

Calls for action have not occurred overnight.

  • In Washington, trade associations like Digital Content Next have been sounding the alarm on these issues for years. DCN's President Jason Kint began writing op-eds about the issues of Facebook's data collection going beyond consumer expectations as far back as 2014.

Some trade bodies are concerned that efforts to regulate digital marketing in response to recent crises may undermine existing industry efforts.

  • "What is critical is that whatever regulation or other steps that are taken be done very  judiciously and carefully to not undermine legitimate efforts in the advertising sector that have fostered the robust growth and health of the Internet and mobile media," says Dan Jaffe, EVP of Policy for the Association of National Advertisers.

Editor's note: Mozilla was removed from the current list of big brands, like Subway and Procter and Gamble, who say they're pulling back ad dollars.

Go deeper

Toyota to build $1.3 billion U.S. battery plant in North Carolina

The all-electric Toyota bZ4X, the company's first battery-electric vehicle, at the Los Angeles Auto Show in Los Angeles, California on Nov. 17. Photo: Frederic J. Brown/AFP via Getty Images

Toyota announced Monday it's investing $1.3 billion to construct an electric vehicle battery "megasite" near Greensboro, North Carolina, set to open in 2025.

Why it matters: Toyota's Prius hybrid won environmental plaudits when it launched in 1997, but it has since lost ground to electric vehicle world leader Tesla, per Axios' Joann Muller. This battery plant will be the first to produce automotive batteries for Toyota in North America.

3 hours ago - Politics & Policy

Congress hunts for shortcut to pass defense funding, debt limit combo

Senate Majority Leader Chuck Schumer returned to his office Monday. Photo: Anna Moneymaker/Getty Images

The scramble in Congress to pass the National Defense Authorization Act is being complicated by an effort to tie it to a needed hike in the federal debt limit.

Why it matters: The House and Senate are rapidly coming up against a series of deadlines they must address before the end of the year — or risk disrupting crucial military funding and upending the economy. Congressional leaders are now hoping they can knock out both "must-pass" priorities in one, complex swoop.

Scoop: Inside Jake Sullivan's call with U.S. hostages' families

Photo: Jim Lo Scalzo/EPA/Bloomberg via Getty Images

National security adviser Jake Sullivan spoke last week with relatives of U.S. hostages and others wrongfully detained abroad, after more than two dozen families expressed frustrations about their inability to get a meeting with him or President Biden, Axios has learned.

Why it matters: Participants on the video call, which began at 7pm ET Friday and lasted more than an hour, told Axios they didn't get satisfactory answers to many of their questions. Nonetheless, they were encouraged by Sullivan's commitment to follow up and pledge to be personally available to them and others going forward.