“The do-not-track system could put an end to the technological ‘arms race’ between tracking companies and people who seek not to be monitored.” – David Vladeck, FTC
David Vladeck is right. The Do Not Track system would put an end to the technological “arms race” – but that’s not a good thing. Instead, its the nuclear option that will halt ongoing industry innovation and consumer welfare.
This has been unofficial privacy week in Washington, DC. Wednesday saw the release of the FTC’s privacy report. Yesterday was the House Commerce Committee hearing; phrased in the form of a question, the tile of the hearing was a bit presumptuous: “Do-Not-Track Legislation: Is Now the Right Time?” And today, NetChoice responds with why the answer to that question should be No.
Do Not Track is a Blunt Response, Not an Informed Choice
The FTC’s report calls for a “uniform and comprehensive” way for consumers to decide whether they want their activities tracked. The Commission points to a Do Not Track system consisting of browser settings that would be respected by web tracking services. A user could select one setting in Firefox, for example, to opt out of all tracking online. The FTC wrongly calls this “universal choice.”
Really, it’s a universal response. It’s a single response to an overly-simplified set of choices we encounter on the web. This single response means that tracking for the purpose of tailored advertising is either “on” or “off.” There is no middle setting. But it is the “middle” where we want consumers to be. The middle setting would represent an educated setting where consumers understand the tradeoffs of interest-based advertising – in return for tracking your preferences and using them to target ads to you, you get free content/services. But an on/off switch is too blunt and not, err, targeted enough. There is no incentive for consumers to learn about the positives, they’ll only fear the worst-case scenarios and will opt-out. In return they’ll also opt-out of the benefits. [more on the “middle” below].
Do Not Track is nothing like Do Not Call
One of the fallacies about Do Not Track is that it would simply be like Do Not Call. But buyer beware: Do Not Compare the Two – they are nothing alike. As the IAB states in its analysis, there are fundamental technical differences:
Phone calls consist of one-to-one connections and are easily managed because each phone is identified by a consistent phone number. In contrast, the Internet is comprised of millions of interconnected websites, networks and computers—a literal ecosystem, all built upon the flow of different types of data. To create a Do Not Track program would require reengineering the Internet’s architecture.
Moreover, there are immense cost-benefit differences, too. Telemarketing is marketing, nothing transformational about that. Tracking is about marketing too, but it’s also much more: content personalization. As Fred Wilson described in yesterday’s New York Times debate, “[t]racking is the technology behind some of the most powerful personalization technologies on the Web. A Web without tracking technology would be so much worse for users and consumers.”
The “Middle Ground” is the Self Regulatory Approach Already Underway
Underlying this entire debate, and the disconnect between the benefits of tracking along with its costs, is the need for industry transparency and consumer education. Increasing transparency and promoting education would place the online industry squarely in the sweet spot, the “middle ground” where consumers are presented with the appropriate information to make informed decisions.
Thankfully, this process is already underway. It’s the appropriately named Self Regulatory Program for Online Advertising. Central to it is the Advertising Option Icon, which allows consumers to understand why it is they received certain targeted ads and to opt-out of future ads. It’s a just-in-time approach the kind of teachable moments that will truly educate and inform the meaning behind the choice.
The icon has only recently been activated, and the mechanisms to hold companies accountable will go live early in 2011. Let’s wait for this industry-led initiative to take hold before we talk about more extreme Do Not Track measures.
Simple responses don’t work for complex issues. That’s why we see a simple “do not track” response as failing both online consumers and industry. Instead, let’s encourage the “middle” ground here of tailored responses for diverse forms of information sharing. It’s an arms race we want to encourage, as companies compete based on privacy policies and new technological innovation. Admittedly, throwing hand grenades is harder than dropping bombs, but innovation and consumer welfare will be rewarded in the long run.