The IAB Multi-State Privacy Agreement (MSPA) represents an important industry framework designed to help digital advertising companies comply with complex and evolving privacy regulations across multiple U.S. states. Below is a a decision tree guide about permitted digital advertising activities, covered transactions as designated by 1st party, opt outs, how it functions, and a guide below about the significance in the modern privacy landscape that the MSPA delivers on.
Core Purpose and Background of the MSPA
The MSPA was developed by the Interactive Advertising Bureau (IAB) as a contractual framework specifically designed to help advertisers, publishers, agencies, and ad-tech intermediaries navigate compliance with state privacy laws that went into effect in 2023. These laws applied in five states at the time. Now we know about akl of the new state privacy laws that encompasses 20 different frameworks and laws while not including the other 15 at the time of creation and leaving out the litigation privacy laws such as CIPA and VPPA:
- California
- Virginia
- Colorado
- Connecticut
- Utah
The agreement serves as a standardized approach to managing consumer privacy rights and data processing permissions across these jurisdictions, reducing the complexity of multiple compliance frameworks.
Key Operating Modes
As illustrated in the decision tree above, the MSPA establishes two primary operating modes that First Parties (typically publishers and advertisers) can select:
1. Service Provider Mode
In this mode, downstream participants always function as service providers. They’re restricted from “selling,” “sharing,” or processing personal information for “targeted advertising.” This is a more restrictive approach where data usage is limited to specific service-oriented purposes.
2. Opt-Out Option Mode
This mode allows signatories to potentially engage in activities like selling, sharing, or targeted advertising – but only when consumers haven’t exercised their opt-out rights. The decision tree shows three possible consumer scenarios:
- Consumer opts out of “sales” only
- Consumer opts out of “targeted advertising” or “sharing” only
- Consumer opts out of both “sales” and “targeted advertising” or “sharing”
Permitted Digital Advertising Activities
The decision tree maps out which specific digital advertising activities are permitted under different scenarios. These activities include:
- First-Party Advertising (generally permitted)
- Targeted Advertising (varies based on mode and consumer choices)
- Third-Party Segment Creation (varies based on mode and consumer choices)
- Frequency Capping Activities (generally permitted)
- Negative Targeting (generally permitted)
- Ad Reporting functions
- Measurement of Ad Performance
- Market Research for Campaign Insights
- Ad Fraud Detection
- Ad Viewability Measurement
The chart uses Y/N indicators to show whether each activity is permitted depending on the mode and consumer opt-out status, with variations across different jurisdictions.
Legal and Technical Significance
The MSPA functions as a contractual agreement between participants in the digital advertising ecosystem. By becoming signatories, companies agree to abide by standardized terms that ensure compliance with relevant state privacy laws but are not required as this is all voluntary. This creates several benefits:
- Standardization of compliance approaches across multiple states
- Clearer expectations between business partners
- More consistent consumer privacy experiences
- Reduced legal complexity for participating organizations
The agreement also connects to technical implementation standards that enable these privacy choices to be communicated throughout the advertising technology chain.
Related Concepts Often Searched
Multi-State Privacy Agreement Template
The IAB provides standardized agreement templates for companies wishing to become signatories. These templates contain the specific contractual language companies must agree to regarding data handling practices, consent mechanisms, and consumer opt-out rights.
Multi-State Privacy Agreement Example
Examples of the MSPA in action would show how a publisher might implement the required consent mechanisms on their website, how data flows between different parties under the agreement, and how consumer choices affect downstream data usage.
IAB Privacy
The IAB (Interactive Advertising Bureau) has developed comprehensive privacy initiatives beyond just the MSPA. Their privacy work includes developing technical standards, policy frameworks, and educational resources to help the digital advertising industry navigate evolving privacy regulations.
IAB GPP (Global Privacy Platform)
The IAB Global Privacy Platform is a technical framework that works alongside the MSPA. It provides a standardized way to capture, store, and transmit privacy preferences throughout the digital advertising supply chain. The GPP helps implement the contractual requirements of the MSPA by ensuring consumer choices are properly communicated to all participants.
IAB MSPA Signatory List
The IAB maintains an official list of companies that have signed the Multi-State Privacy Agreement. Being on this list indicates that a company has formally committed to complying with the agreement’s terms.
MSPA Signatories
MSPA signatories include a wide range of companies throughout the digital advertising ecosystem:
- Publishers (websites and apps that display ads)
- Advertisers (brands that purchase advertising)
- Demand-side platforms (DSPs)
- Supply-side platforms (SSPs)
- Data management platforms
- Measurement and analytics providers
- Ad verification services
Becoming a signatory means formally agreeing to implement the required technical and operational measures needed for compliance with the agreement.
Significance for Different Stakeholders
For Publishers
Publishers must implement appropriate consent mechanisms on their sites and pass this information to their advertising partners. They need to decide which operating mode to use (Service Provider or Opt-Out Option).
For Advertisers
Advertisers need to ensure their data collection and usage practices align with the agreement’s requirements, particularly when using data for targeted advertising.
For Ad Tech Companies
These companies must build technical systems that can receive, respect, and pass along consumer privacy preferences throughout the advertising chain.
For Consumers
While not direct participants in the agreement, consumers benefit from more standardized privacy options and clearer choices regarding how their data is used for advertising purposes.
The MSPA represents a significant industry effort to create more standardized approaches to privacy compliance in an increasingly complex regulatory landscape. As more states introduce privacy legislation, frameworks like the MSPA will likely continue to evolve to address new requirements.
