If you follow privacy policy, you won’t want to miss these two great events.
First, on Monday (12/7), the Federal Trade Commission will be holding the first of three “Exploring Privacy” roundtables at its conference center (601 New Jersey Avenue, NW). This all-day event (agenda) will include five panel discussions, and remarks by FTC Chairman Jon Leibowitz, Commissioner Pamela Jones Harbour, and David C. Vladeck, Director of the FTC’s Bureau of Consumer Protection. The lineups for all five panels look excellent. The FTC deserves great credit for trying hard to represent the broad spectrum of expert opinion on this profoundly important issue. PFF President Adam Thierer will be on on the Consumer Expectations and Disclosures panel (11:00?12:15), I will be on the Online Behavioral Advertising panel (1:30?2:45 p.m.), and the Cato Institute’s Jim Harper will be on the Benefits and Risks of Collecting, Using, and Retaining Consumer Data panel (9:15?10:45 a.m.). For those who cannot attend in person, event will be webcasted, and I will be live-tweeting key highlights (except for my own panel, of course).
Here are the comments submitted to the Roundtable. The second Roundtable will take place January 28, 2010 in Berkeley, CA with a third to follow in Washington in the spring.
Second, on Wednesday (12/9), Rob Atkinson of The Information Technology and Innovation Foundation will be moderating a debate about targeted online advertising at ITIF (1101 K Street, Washington, DC 20005, Suite 610). Rob is probably the single most thoughtful observer of this debate, and he’s put together a terrific panel that includes my sparring partner Jeff Chester, Howard Beales (whose excellent economic work I have cited heavily in my own writings about the benefits of one advertising), the FTC’s Peder Magee (one of the key organizers of the Exploring Privacy roundtable series, and also an exceptionally thoughtful and fair observer) and, if we’re lucky, CDT’s Ari Schwartz (a staunch defender of P3P).
What are the consumer protection issues of online social media sites and what’s the right regulatory balance? That was the focus of today’s Northern Virginia Technology Council (NVTC) event called “Social Media and Consumer Protection: Finding a Balance.” The breakfast event featured Tim Sparapani of Facebook, Pablo Chavez of Google, and Ari Schwartz of the Center for Democracy and Technology (CDT).
But the event wasn’t about consumer protection (in the traditional sense), it was about privacy. Privacy online is today’s issue du jour, whether it is marketing to children or collecting and sharing data for targeted ads. The FTC has devoted a series of roundtable discussions toward privacy, with the first one beginning Dec. 7.
Privacy’s getting so hyped-up that I believe it to be the next “online safety” sort of issue where isolated and particularized incidents become sensationalized in the media and among regulators, creating counterproductive techno-panics that other commentators have described. This shift is apparent as many policymakers and advocacy groups become increasingly hostile toward targeted online advertising.
But are social media and privacy at odds such that there needs to be a “balance”–whatever that entails? While this question was never explicitly asked, it is clear that Ari Schwartz would say yes because he asserts that consumers don’t know what information is being collected and that users need help to gain control over their own data. Continue reading →
My colleague (and boss) Adam Thierer had a great post last week about how “fart apps” are a great example of the generative nature of the mobile phone application marketplace. But Fart apps are just one type of “soundboard” application. A typical soundboard app has a bunch of buttons, and each time you press a button a sound is played. Most soundboards play catchphrases from popular movies and TV shows. According to AndroidZoom.com, there are 319 applications in the Android Market with “soundboard” in the title or description. Most (280) of them are free.
Almost all the free soundboards I tried include advertising from Google. The three main developers of soundboard apps for Android are Androidz , aspidoff, and Raz Corp. Androidz has ads from DoubleClick and aspidoff and Raz Corp (who’s apps seem exactly the same) both have ads from AdMob (which Google recently acquired). I’m all in favor of ad-supported content, but I suspect that the sound clips used in these soundboards are not licensed.
Continue reading →
I wrote here a couple of months ago about the shady practice among a few Internet retailers of handing off customers who accept a “special offer” to a company that charges people a monthly fee for some kind of credit monitoring service. And I argued hopefully that maybe technologists and the Internet community could generate a response to this problem:
Being a smart, informed, and aggressive consumer is each person’s responsibility if a free market is to operate well. The alternative is a negative feedback loop in which government authorities protect us, we rely on that protection and stop policing retailers. Thereby we abandon the field of consumer protection to government authorities, who—try as they might—can never do as good a job for us as we can for ourselves.
The Senate Commerce Committee is having a hearing today on “Aggressive Sales Tactics on the Internet and Their Impact on American Consumers.”
This will be a busy week for those who follow privacy policy in Washington:
- Monday (11/16) 11 am: the coalition of 10 so-called “privacy advocacy” groups that recently demanded sweeping regulation of online data collection and use will be holding a briefing for congressional staffers on their demands in 2322 Rayburn House Office Building.
- Wednesday (11/17), 4 pm: A “bipartisan briefing for staff of Members on the Subcommittees” in 2322 Rayburn, followed by a Democratic staff briefing.
- Thursday (11/18), 10 am: The House Energy & Commerce Committee’s Subcommittee on Communications, Technology & the Internet and Subcommittee on Commerce, Trade & Consumer Protection will hold a joint hearing on “Exploring the Offline and Online Collection and Use of Consumer Information” in 2123 Rayburn.
The witness list for Thursday’s hearing has not yet been released, but reportedly includes Pam Dixon of the World Privacy Forum and Prof. Chris Hoofnagle of Berkeley Law, as well as three industry representatives (but no skeptics of regulation from outside of industry, who might ask “whether privacy advocates” really have consumers interests at heart). Dixon and Hoofnagle may well be the only two people on the planet who could rival Jeff Chester in their paranoia about online advertising.
So I suspect the hearing will consist largely of the two of them trying to dodge the question Adam Thierer and I keep asking: What’s the harm that requires government regulation? For them—and for David Vladeck—the new head of the FTC’s Bureau of Consumer Protection—the answer seems to be that no real harm need be established to justify regulation, whatever the cost to consumers of regulation, because “harm” may be defined by anecdote and in terms of “dignity interests”—a legal standard that has all the intellectual and factual rigor of a plate full of Jell-O shots (intoxicating and fun for parties but squishy with little real substance).
Adam and I will be raising this and other questions at the FTC’s Exploring Privacy workshop on December 7. I will be participating in the online behavioral advertising panel, and PFF President Adam Thierer will be participating in the consumer expectations/surveys panel. Check out my comments to the FTC for more on our perspective. Continue reading →
Why do (most) stores have walls? Because, obviously, walls are generally (at least in the developing world) a cost-effective technology for enforcing the value exchange that stores offer customers: products or services for customers’ cash. Open-air markets exist, but tend to be reserved for items cheap enough that the costs of theft fall below some “acceptable loss threshold.” All stores ultimately rely on employees and the police to chase down shoplifters.
Yet many valuable media products have long been simply given away by their producers in the implicit value exchange of advertising: newspapers, magazines, radio, television and online content/services for customers’ attention. It’s as if publishers set up a store with no walls and put up a big “steal this book!” sign inviting shoplifters in. Advertisers simply have to hope that their ads are interesting enough to catch the attention of readers/viewers/listeners—and, on the Web, maybe even get users to click on the ad! It should be obvious that the lack of any “enforcement technology” simply means that there will be less funding for this “free” stuff enjoyed by consumers—just as there would be fewer goods and/or higher prices if stores were prevented from discouraging or punishing shoplifting.
Ethicists could debate until the cows come home whether ad-blocking (or ad-ignoring) is morally tantamount to shoplifting—taking without “paying” (through attention)—but who cares? Whatever the morality of it, the important, and undeniable, thing is that those who ignore/block commercials are free-riding on the economic value created by those who don’t.
Enter Apple, which recently filed a patent application for a technology intended to ensure that users are seeing, and actually paying attention to, ads. Randall Stross, author of the excellent book Planet Google, hates the idea of “compelling attention” and suggests that it would so annoy consumers that it would cost Apple more in reputational capital than it’s worth. Stross may well be proven right in the marketplace (and, if so, fine), but does that make Apple’s proposal wrong? The brilliantly satirical “Secret Diary of Steve Jobs” calls the idea “evil,” and suggests that, in the pretended voice of Steve Jobs: Continue reading →
by Berin Szoka & Adam Thierer
The latest call for “search neutrality” and “cloud neutrality” comes from Andrew Odlyzko of the University of Minnesota’s School of Mathematics & Digital Technology Center—and probably among the top ten most influential academics in Internet policy. In his latest Review of Network Economics article “Network Neutrality, Search Neutrality, and the Never-ending Conflict between Efficiency and Fairness in Markets,” Odlyzko shows (discussed by Ars) just how slippery the slippery slope of Net neutrality regulation will be—exactly as we predict in our recent paper “Net Neutrality, Slippery Slopes & High-Tech Mutually Assured Destruction.” Odlyzko concludes:
for pervasive infrastructure services that are crucial for the functioning of society, rules about allowable degrees of discrimination have traditionally applied, and are likely to be demanded for the Internet in the future. Those rules have often been set by governments, and are likely to be set by them in the future as well. For telecommunications, given current trends in demand and in rate and sources of innovation, it appears to be better for society not to tilt towards the operators, and instead to stimulate innovation on the network by others by enforcing net neutrality. But this would likely open the way for other players, such as Google, that emerge from that open and competitive arena as big winners, to become choke points. So it would be wise to prepare to monitor what happens, and be ready to intervene by imposing neutrality rules on them when necessary.
Odlyzko identifies search and cloud computing as the next most likely targets of “neutralization” and explains how calls for regulating these virtual “networks” would flow logically from the current arguments for neutrality mandates at the infrastructure layer:
The net neutrality debate is often pictured as a contest between the two most prominent corporate champions of the opposing sides, AT&T and Google. But the underlying issue predates both companies by centuries. It was never resolved completely, since it arises from a conflict between society’s drives for economic efficiency and for fairness. There is no reason to expect that this conflict will lessen, and instead there are arguments that suggest it will intensify. Should something like net neutrality prevail, the conflict would likely move to a different level. That level might become search neutrality. (And allegations about discriminatory behavior of a web search provider have surfaced recently in China, Tschang (2009).) Or, to take another currently popular concept, if “cloud computing” does become as significant as its enthusiasts claims, it could lead to dominance of a single service provider. The effective monopoly of that dominant player could then become perceived as far more insidious than any of the “walled gardens” or “intelligent network” that telcos would like to build.
There is, of course, an entirely different approach to the issue that does not involve the sort of across-the-board cyber-meddling that Odlyzko suggests: Freedom for all players at all layers of the Net to invest and innovate in the “networks” or “platforms” that offer content, connectivity and services. Continue reading →
Adam Thierer and I will be participating in two separate panels at the FTC’s December 7 “Exploring Privacy” workshop discussing, respectively, surveys & expectations and online behavioral advertising. Below is the cover letter I filed as part of my comments (PDF & Scribd), along with four past PFF publications and a working paper on the benefits of online advertising.
Privacy Trade-Offs: How Further Regulation Could Diminish Consumer Choice, Raise Prices, Quash Digital Innovation & Curtail Free Speech
In general, we at PFF have argued that any discussion about regulating the collection, sharing, and use of consumer information online must begin by recognizing the following:
- Privacy is “the subjective condition that people experience when they have power to control information about themselves and when they exercise that power consistent with their interests and values.”[1]
- As such, privacy is not a monolith but varies from user to user, from application to application and situation to situation.
- There is no free lunch: We cannot escape the trade-off between locking down information and the many benefits for consumers of the free flow of information.
- In particular, tailored advertising offers significant benefits to users, including potentially enormous increases in funding for the publishers of ad-supported content and services, improved information about products in general, and lower prices and increased innovation throughout the economy.
- Tailored advertising increases the effectiveness of speech of all kinds, whether the advertiser is “selling” products, services, ideas, political candidates or communities.
With these considerations in mind, policymakers must ask four critical questions:
- What exactly is the “harm” or market failure that requires government intervention?
- Are there “less restrictive” alternatives to regulation?
- Will regulation’s costs outweigh its supposed benefits?
- What is the appropriate legal standard for deciding whether further government intervention is required? Continue reading →
Two recent trends evidence the importance of targeted Internet advertising–more money going toward Internet ads, and fewer people that click on display banner ads.
First, the good news is that Internet advertising is rebounding (or at least seeing a reversal in the the decline of ad $). Tough economic times has decreased ad dollars among all marketing mediums. But online ads will be the first to see new demand from marketers. And some online companies are weathering the bad economy just fine. Google’s ad revenue rose 7 percent in the third quarter.
Compare with McClatchy (the U.S.’s 3rd largest newspaper company), where according to the AP article print advertising plunged 32 percent in the third quarter, but its online ad sales increased 3 percent.
So ad dollars are increasing. Where will money be spent? On targeted ads.
comScore released a study earlier this month that showed most people don’t click on display advertisements. As someone who never does either, I don’t find this surprising. According to comScore:
“The act of clicking on a display ad is experiencing rapid attrition in the current digital marketplace,” said Linda Anderson, comScore VP of marketing solutions and author of the study. “Today, marketers who attempt to optimize their advertising campaigns solely around the click are assigning no value to the 84 percent of Internet users who don’t click on an ad.”
This is huge. Online companies rely on advertisements to pay the bills and will need to better target ads to their users if they want to stay in business.
If we want to see the next generation of online content and services, then we need to stay vigilant to convince members of Congress (Boucher) and the FTC not to impose more restrictions on interest-based advertising, such as opt-in requirements.
Sometimes legislators vote along political party interests, sometimes in their self interest, and as we saw in Maine–sometimes legislators will have the constitutional interests of free speech and the commerce clause in mind.
I traveled with my NetChoice colleague Steve DelBianco to Augusta last week to testify at a joint judiciary committee hearing of the Maine legislature. Our mission: persuade the committee members to repeal the Predatory Marketing Act, which became law just two months ago–and a law so bad that it ranked #1 on NetChoice’s iAWFUL top ten list of worst legislation.
This law’s potentially sweeping (negative) impact is a big deal. So big that the Maine legislature met out-of-session to re-consider it. It dedicated a webpage to the hearing and received over 30 comments from various interests — including comments from NetChoice.
The law seriously restricts the exchange of information between Web 2.0 services and their users by making it unlawful to knowingly collect or receive health-related or personal information for marketing purposes from a minor, without first obtaining verifiable parental consent. In effect, the law restricts advertising that is most relevant to user interests.
We arrived confident but with a “tail between our legs” feeling — after all, we had just sued the state of Maine and agreed to a court order that said very favorable words about our chances to win on the merits. In the court case, NetChoice was joined by Reed Elsevier, the Maine Independent Colleges Association, and the Maine Press Association in calling for an injunction against the law, arguing that it tramples First Amendment rights while wreaking havoc with interstate commerce.
So here we were, with but a day or two to show how the existing law broadly harms a number of online services. Continue reading →
The Technology Liberation Front is the tech policy blog dedicated to keeping politicians' hands off the 'net and everything else related to technology.