On Simple Privacy Policies, Free Internet Services, and “Adequate Notice”

by on February 12, 2009 · 22 comments

So, the Federal Trade Commission (FTC) released its revised “Self-Regulatory Principles for Online Behavioral Advertising” today and it’s bound to generate a lot of commentary from those privacy advocates who seem to believe that we can never go far enough in regulating the flow of information online or limiting commercial marketing.  Berin Szoka and I will have a PFF paper out shortly [update: here it is] discussing the report in more detail, but for now I just wanted to mention one thing that peeves me about this report and the debate about online advertising in general.

The thing I find so intriguing about reports like this is the way that they implicitly assume that consumers are utterly helpless sheep who completely fail to understand how to protect their own privacy, to the extent those consumers are even sensitive about it at all. Specifically, there’s always this argument about how consumers don’t have “adequate notice” or “meaningful choice” when it comes to website privacy policies or how their information might be collected or used to serve up better ads.

Frankly, I think these concerns have been completely blown out of proportion by privacy zealots who would make just about any use of information, or effort to use it to target ads, a federal crime.  Worse yet, there’s a ‘something-for-nothing’ element to these debates that always irks me.  Some of these regulatory advocates seem to be under the impression that all these free Internet services and innovations fall to us like manna from heaven and that the good times will just keep on rollin’ right along even as they advocate regulations that would completely undercut the Internet’s primary economic engine: targeted advertising.

Regardless, here’s my little contribution to the movement toward simpler privacy policies to make sure web users understand what they are getting into and why they have to give a little to get a little. I want every Internet company to adopt the following privacy policy:

Privacy Notice for Dummies
(or “There Really is No Such Thing as a Free Lunch”)

“Hello there, and thanks for your interest in our free service! We’re happy to provide you with this free service, but we want to make sure you understand the nature of the deal. This may be a free service but there truly is no such thing as free lunch in this world. We’ve got a sharp staff here just itching to innovate even more and provide the public with all sorts of cool new products and services.  But, funny thing is, some of them like to get paid!  Yes, it’s true. Even hard-core Silicon Valley socialists like money. So, we need something in return from you since you’re not paying us directly. Therefore, unless you would like to send us beer, we’re going to need some of your information to create a better platform and attract advertisers so we can pay our people.

OK, we know that sounds a little uncool and we’re still getting used to this capitalist gig ourselves. But did we mention that our service is free! As in $0.00. You pay zero, zip, nadda, nothing! Isn’t that cool? It really kinda is a socialist paradise when you think about it.

But you still have to help us out here. If we can just use a little information about you and some of the information you enter as search terms or in other places on our site, then we can craft better, more targeted advertising that will actually be of more interest to you. And that’ll also mean that the mother’s milk of the Internet — advertising $$$ — will keep flowing our way to keep the free services flowing your way.

We hope you understand that deal and think it’s fair. Because, believe it or not, that’s the engine that keeps this thing called the Net going. (Seriously, we’ve tried everything else and it didn’t work.)

Of course, you could always choose not to use our free service.  You have all the power here, after all. You don’t have to click that button below that says “Accept, and Let Me Get Started Now!” or “Yes, Shut Up and Give Me the Free Goodies.” You can always just navigate away to another site. That’s your choice. But we certainly do hope you’ll stick with us and accept all these free services we have to throw your way. And if you do accept but later don’t like the way we do business, you’ll still be free to forgo those free services and tell us to buzz off.

Finally, if you would like to see the outrageously long and completely indecipherable version of this privacy policy as penned by the overpaid lawyers we are force to hire to make FTC regulators happy, then click here. It’ll give you more details about how we’ll use your information to deliver you better services. But if you are satisfied with the nature of this deal and ready to get started, then click below and let the freebies start flying your way!”

See, now wasn’t that simple? Can we get on with letting the Internet work better already? Geesh.

  • DB

    Wow. That is quite a tirade. Clearly, you are addressing some of the more extreme privacy advocates who want to ban or manipulate online business models. Among moderates, however, I think there is a very legitimate debate surrounding the self-regulatory approach:

    Why shouldn't we standardize privacy policies?

    Above the pages and pages of legal language, you could have a simple table that companies would be required to fill in to the best of their ability. This would be similar to standardizing food labels in the grocery store. Personally, I find it very helpful that I can pick up two products and immediately compare their nutritional facts. This makes me a more informed consumer before I decide to purchase.

  • http://www.techliberation.com Adam Thierer

    That doesn't sound like “standardizing privacy policies,” that just sounds like providing more information about policies, which I think is great. I want robust competition between companies in term of privacy policies, not just a Washington-approved, one-size-fits-all model. Transparency is fine. Micromanaging business models is not.

  • DB

    Wow. That is quite a tirade. Clearly, you are addressing some of the more extreme privacy advocates who want to ban or manipulate online business models. Among moderates, however, I think there is a very legitimate debate surrounding the self-regulatory approach:

    Why shouldn't we standardize privacy policies?

    Above the pages and pages of legal language, you could have a simple table that companies would be required to fill in to the best of their ability. This would be similar to standardizing food labels in the grocery store. Personally, I find it very helpful that I can pick up two products and immediately compare their nutritional facts. This makes me a more informed consumer before I decide to purchase.

  • http://www.techliberation.com Adam Thierer

    That doesn't sound like “standardizing privacy policies,” that just sounds like providing more information about policies, which I think is great. I want robust competition between companies in term of privacy policies, not just a Washington-approved, one-size-fits-all model. Transparency is fine. Micromanaging business models is not.

  • DB

    Wow. That is quite a tirade. Clearly, you are addressing some of the more extreme privacy advocates who want to ban or manipulate online business models. Among moderates, however, I think there is a very legitimate debate surrounding the self-regulatory approach:

    Why shouldn't we standardize privacy policies?

    Above the pages and pages of legal language, you could have a simple table that companies would be required to fill in to the best of their ability. This would be similar to standardizing food labels in the grocery store. Personally, I find it very helpful that I can pick up two products and immediately compare their nutritional facts. This makes me a more informed consumer before I decide to purchase.

  • http://www.techliberation.com Adam Thierer

    That doesn't sound like “standardizing privacy policies,” that just sounds like providing more information about policies, which I think is great. I want robust competition between companies in term of privacy policies, not just a Washington-approved, one-size-fits-all model. Transparency is fine. Micromanaging business models is not.

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