Government Relations Update · MARCH 2026
- Government Relations
- Mar 24
- 5 min read
MODPA Is Here. Enforcement Isn't Hypothetical Anymore.
The Maryland Online Data Privacy Act has been law since October 2023. On April 1, the Comptroller's enforcement authority kicks in—which means the window for "we're working on it" has closed.
For Baltimore agencies, the most consequential provisions are the ones that directly touch campaign architecture. Targeted advertising using sensitive personal data is prohibited. Profiling individuals without a lawful basis is prohibited. And perhaps most immediately actionable for anyone running youth-facing campaigns: targeted advertising to users you know—or reasonably should know—are under 18 is prohibited, full stop.
There's no carve-out for small agencies, and MODPA's thresholds are tied to how many Maryland consumers you touch, not how large your company is. Mid-sized shops are very much in scope.
What this means in practice: if your data strategy for a campaign hasn't been reviewed with MODPA in mind, that review needs to happen now. Not after the campaign launches. Not when a client asks. Before the brief goes into production.
There's a version of this that's actually good for the agencies in this room. Clients who are nervous about legal exposure are going to gravitate toward partners who can explain data flows clearly, justify collection practices, and build campaigns that don't depend on sensitive targeting to perform. That's a differentiator. Privacy-forward creative isn't a limitation—it's a service offering.
The Digital Ad Tax: What Changed, and What It Means for Your Billing
Maryland's Digital Advertising Gross Revenues Tax remains the only state-level tax of its kind in the country. Most independent Baltimore agencies don't pay it directly — the tax applies to large entities with significant Maryland digital ad revenue and high global annual gross revenues, at rates ranging from 2.5% to 10%. But nearly everyone in our ecosystem feels its downstream effects.
In September 2025, the Fourth Circuit issued a ruling that matters for how the tax shows up in your vendor relationships and client contracts. The court struck down Maryland's attempt to prohibit pass-through line items, meaning platforms and large buyers can now disclose the tax as a separate fee on invoices. Additionally, Comptroller guidance effective January 1, 2026 tightened recordkeeping requirements and clarified that taxable digital ad services must be both programmatic and visually conveyed. The practical implication: when a Maryland-specific digital ad tax line appears in a platform invoice or media buy, it's not a billing error. It's the new normal. Agencies that understand where it comes from—and can explain it calmly to clients—protect their relationships. Agencies that get caught flat-footed have an awkward conversation that erodes trust.
Pull your billing templates and vendor contracts. Make sure the language accounts for Maryland-specific fee pass-throughs. It's a small fix with a meaningful client service payoff.
Federal Action on Kids and Teens: This Week's News Is Your Next Campaign Constraint
In the first week of March 2026, both chambers of a divided Congress moved on children's digital safety simultaneously—something that hadn't happened in nearly a decade.
Here's the short version of a complex legislative picture: the House Energy and Commerce Committee advanced the Kids Internet and Digital Safety (KIDS) Act, which bundles the Kids Online Safety Act (KOSA) with other measures requiring platforms to restrict default settings for minors up to age 17, disclose how recommendation algorithms work, and give parents meaningful oversight tools. Separately, the Senate passed COPPA 2.0 unanimously. That version covers ages 13 to 16, bans targeted advertising to minors entirely, and creates a
dedicated FTC enforcement division.
None of these are signed into law yet. But the direction of travel is unmistakable, and it aligns directly with what MODPA already requires at the state level. For agencies running youth-facing campaigns—education clients, consumer brands, healthcare, nonprofits targeting families—the emerging federal standard is: know the age of your audience, constrain your targeting accordingly, and document your compliance posture.
The age protection bar is also rising. Where COPPA historically covered users under 13, these newer bills push protection up to 16 or 17. The longstanding workaround of "just focus on users above their teens" is going away.
That requires a real creative and media strategy adjustment, not just a legal checkbox.
Maryland's Emerging AI and Pricing Policy Landscape
The General Assembly is also moving on a set of bills that don't have enforcement dates yet but signal where the regulatory environment is headed for personalization and automated marketing. Maryland lawmakers have opened hearings on a ban on "surveillance pricing"—the practice of adjusting prices for individual consumers based on behavioral and location data. Bills are also advancing on algorithmic rent-setting and AI-generated deepfakes. None of these are directly aimed at advertising, but the logic behind them—that automated personalization tools can harm consumers when left unregulated—applies squarely to the tools many agencies use to optimize campaigns.
If you're building or deploying AI-powered marketing tools for clients, now is a good time to think about disclosure language, explainability, and what your client agreements say about data sourcing. The policy conversation in Annapolis is moving faster than most people in our industry realize.
The FTC's Back-to-Basics Enforcement Posture
At the federal level, the FTC's 2026 enforcement posture has been described as "back to basics"—not sweeping new rules, but sharpened scrutiny of practices that have always been problematic and now have recent case law to support aggressive action.
Four areas are most relevant for Baltimore agencies. First, subscription and negative-option marketing: the FTC is actively pursuing services where cancellation is harder than enrollment, with a $2.5 billion settlement against Amazon in September 2025 as the signal flare. If you're running campaigns for subscription products, the UX and copy around trial offers, renewals, and cancellation need to be airtight. Second, children's data under COPPA: the FTC is issuing orders to companies and their third-party vendors alike, which means agency tools and tracking infrastructure used on youth-facing campaigns are fair game. Third, "junk fees" and pricing transparency: a rule that took effect May 2025 requires all-in pricing to be disclosed upfront across ticketing, hospitality, and digital services. If your clients are in any of those sectors, their checkout flows and ad copy need to match final pricing.
Fourth, origin claims: if you're writing copy with "Made in USA" anywhere in it, there's a substantiation requirement with teeth — and recent enforcement shows the FTC is moving on it.
The thread across all four areas is the same: consumer clarity isn't optional, and agencies that let ambiguous or friction-heavy copy ship are inheriting their clients' compliance risk.
The Bigger Picture
What all of this adds up to is a market where agencies that have done the internal work on data practices, disclosure language, billing transparency, and AI governance—are going to pull ahead. Not because compliance is a competitive advantage in the abstract, but because clients are scared, regulators are moving, and most agencies haven't had these conversations yet.
Our job on the Government Relations Committee isn't just to track legislation. It's to translate what's happening in Annapolis and Washington into language that's useful when you're writing a brief, reviewing a vendor contract, or talking to a nervous client. We'll keep doing that work. As always, if you have questions about how any of these developments affect your agency, reach out to the GR committee at advocacy@baltimoreadvertising.com.
We're in it with you.
AAF BALTIMORE
GOVERNMENT RELATIONS COMMITTEE