Privacy Elitists Launch All-Out Attack on Personalized Advertising Online

by on September 1, 2009 · 19 comments

A coalition of ten self-described “consumer and privacy advocacy organizations” today demanded legislation that would restrict the collection and use of data online for customizing advertising based on Internet users’ interests. I’ll have more to say on this but here are my initial comments:

These so-called “consumer advocates” are actually anti-consumer elitists.  Not only do they presume that consumers are too stupid or lazy to make their own decisions about privacy, but they ignore the benefits to consumers: more relevant advertising plus more and better content.

Advertising has been the “mother’s milk” of media in America since colonial times and the future of media depends on the ability of publishers to replicate that revenue model online.  Micropayments, donations, subscriptions alone simply can’t fund a vibrant marketplace of ideas.  Only personalized advertising can sustain publishers through the Digital Revolution.

Regulatory advocates haven’t demonstrated any harm to consumers that would justify such sweeping preemptive regulation.  By strangling funding for new media, such regulations would amount to an “Industrial Policy” for the Internet.  Instead, policymakers should focus on educating consumers and empowering them by promoting development of better privacy management tools.

  • http://enigmafoundry.wordpress.com eee_eff

    These so-called “consumer advocates” are actually anti-consumer elitists. Not only do they presume that consumers are too stupid or lazy to make their own decisions about privacy, but they ignore the benefits to consumers: more relevant advertising plus more and better content.

    No, you can't make that charge stick. The consumer may want to protect their privacy by enacting the legislation that these groups are advocating. That is a straight-forward way of protecting privacy, by stamping out the problem at it's very source, rather than engage in a losing battle to plug all the sources of lost privacy at their perimeter.

    In particular you have not addressed Ed Felten's excellent comment:

    One of the standard claims about privacy is that people say they value their privacy but behave as if they don't value it. The standard example involves people trading away private information for something of relatively little value. This argument is often put forth to rebut the notion that privacy is an important policy value. Alternatively, it is posed as a “what could they be thinking” puzzle.

    I used to be impressed by this argument, but lately I have come to doubt its power. Let me explain why.

    Suppose you offer to buy a piece of information about me, such as my location at this moment. I'll accept the offer if the payment you offer me is more than the harm I would experience due to disclosing the information. What matters here is the marginal harm, defined as amount of privacy-goodness I would have if I withheld the information, minus the amount I would have if I disclosed it.

    The key word here is marginal. If I assume that my life would be utterly private, unless I gave this one piece of information to you, then I might require a high price from you. But if I assume that I have very little privacy to start with, then selling this one piece of information to you makes little difference, and I might as well sell it cheaply. Indeed, the more I assume that my privacy is lost no matter what I do, the lower a price I'll demand from you. In the limit, where I expect you can get the information for free elsewhere even if I withhold if from you, I'll be willing to sell you the information for a penny.

    Viewed this way, the price I charge you tells you at least as much about how well I think my privacy is protected, as it does about how badly I want to keep my location private. So the answer to “what could they be thinking” is “they could be thinking they have no privacy in the first place”.

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  • http://techliberation.com/author/berinszoka/ Berin Szoka

    As always, I appreciate Ed's thoughtfulness. There might very well be something to that concern if, indeed, users were helpless to protect their own privacy. But if a user really does feel that”they have no privacy,” all they need do is change the cookie management settings in their browser and they will thwart nearly all online tracking.

    If that's not good enough, let's talk about specific ways to empower users to control whatever else they might be worried about.

    But as long as there's a feasible way for users to turn off tracking, Ed's argument amounts to the same tired saw that users just can't be trusted to take care of themselves.

    We should be focusing on making these tools easier, not in changing the defaults, because that change does have real economic consequences for users.

  • http://techliberation.com/author/berinszoka/ Berin Szoka

    As always, I appreciate Ed's thoughtfulness. There might very well be something to that concern if, indeed, users were helpless to protect their own privacy. But if a user really does feel that”they have no privacy,” all they need do is change the cookie management settings in their browser and they will thwart nearly all online tracking.

    If that's not good enough, let's talk about specific ways to empower users to control whatever else they might be worried about.

    But as long as there's a feasible way for users to turn off tracking, Ed's argument amounts to the same tired saw that users just can't be trusted to take care of themselves.

    We should be focusing on making these tools easier, not in changing the defaults, because that change does have real economic consequences for users.

  • http://techliberation.com/author/berinszoka/ Berin Szoka

    As always, I appreciate Ed's thoughtfulness. There might very well be something to that concern if, indeed, users were helpless to protect their own privacy. But if a user really does feel that”they have no privacy,” all they need do is change the cookie management settings in their browser and they will thwart nearly all online tracking.

    If that's not good enough, let's talk about specific ways to empower users to control whatever else they might be worried about.

    But as long as there's a feasible way for users to turn off tracking, Ed's argument amounts to the same tired saw that users just can't be trusted to take care of themselves.

    We should be focusing on making these tools easier, not in changing the defaults, because that change does have real economic consequences for users.

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