Advertising & Marketing

PFF Event Recap: Nuts & Bolts of Online Privacy, Advertising, Notice & Choice

by on May 25, 2010 · 0 comments

We had a great discussion yesterday about the technical underpinnings of the ongoing privacy policy debate in light of the discussion draft of privacy legislation recently released by Chairman Rick Boucher (see PFF’s initial comments here and here). I moderated a free-wheeling discussion among terrific panel consisting of:

Here’s the audio (video to come!)

Ari got us started with an intro to the Boucher bill and Shane offered an overview of the technical mechanics of online advertising and why it requires data about what users do online. Lorrie & Ari then talked about concerns about data collection, leading into a discussion of the challenges and opportunities for empowering privacy-sensitive consumers to manage their online privacy without breaking the advertising business model that sustains most Internet content and services. In particular, we had a lengthy discussion of the need for computer-readable privacy disclosures like P3P (pioneered by Lorrie & Ari) and the CLEAR standard developed by Yahoo! and others as a vital vehicle for self-regulation, but also an essential ingredient in any regulatory system that requires that notice be provided of the data collection practices of all tracking elements on the page. Continue reading →

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Facebook’s Signal, Lost in the Noise?

by on May 24, 2010 · 0 comments

In his op-ed today, Facebook founder Mark Zuckerberg promised further changes to give users better control of privacy settings.  It’s a clear signal that Facebook is seeking to meet user privacy preferences while still attracting enough ad revenue to keep the site free for everyone.  But will these signals even be heard above all the noise made by Facebook’s critics?

That’s the question posed by my colleague Steve DelBianco at the NetChoice blog:

Radio engineers speak in terms of signal-to-noise ratio when they want to measure usable signals against a background of useless static. There’s been a lot of noise over Facebook recently, driven by a feeding frenzy of technology bloggers and journalists.

Their hyperbole hit a high note when some equated Facebook’s privacy drill to BP’s giant oil spill, while others wrote articles (or op-eds? It’s so hard to tell sometimes) that insult Facebook employees and impugn their motives.  Just when you think nothing could rival the noise of Washington’s echo chamber, the technology pundits show us how a real shout-down is supposed to work.

Steve hits hard against the pile-on “feeding frenzy” on Facebook, going so far as to call critics “Chicken Little.” Strong, but also accurate.

While we all support the process of vocal user feedback to improve a product/service, with Facebook there’s more going on. Even Senators with a love for the limelight have jumped on the bandwagon by telling Facebook how to manage a service it gives us for free. Of course, management by Congress is the fastest way to suck innovation and competitiveness out of one of America’s fastest growing industries.

To the extent that productive criticism turns into deafening noise, Facebook’s positive signals will be unfairly distorted.

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“The Rise and Fall of Information Empires” & Constant Growth of Regulation

by on May 23, 2010 · 1 comment

Today’s NYT piece by Brad Stone about Google (Sure, It’s Big. But Is That Bad?) offers a superb example of how to use the rhetorical question in an article headlined to suggest that you might actually be about to write a thoughtful, balanced piece—while actually writing a piece that, while thoughtful and interesting, offers little more than token resistance to your own preconceived judgments.  But perhaps I’m being unfair: Perhaps Stone’s editors removed “YES! YES! A THOUSAND TIMES, YES!” from the headline for brevity’s sake?

Anyway, despite its one-sidedness, the piece is fascinating, offering a well-researched summary of the growing cacophony of cries for regulatory intervention against Google, and also a suggestion of where they might lead in crafting a broader regulatory regime for online services beyond just Google.  In short, the crusade against Google and the crusade for net neutrality (in which Google has, IMHO unwisely been a major player) are together leading us down in intellectual slippery slope that, as Adam and I have suggested, will result in “High-Tech Mutually Assured Destruction” and the death of Real Internet Freedom.

Ironically, this push for increased government meddling—a veritable “New Deal 2.0″—is all justified by the need to “protect freedom.”  But it would hardly be the first time that this had happened. As the great defender of liberty Garet Garrett said of the New Deal 1.0 in his 1938 essay The Revolution Was:

There are those who still think they are holding the pass against a revolution that may be coming up the road. But they are gazing in the wrong direction. The revolution is behind them. It went by in the Night of Depression, singing songs to freedom.

That theme lives on in the works of those like antitrust warrior Gary Reback, an anti-Google stalwart whose book Free the Market: Why Only Government Can Keep the Marketplace Competitive Adam savaged in his review last year. Reback argues:

Google is the “arbiter of every single thing on the Web, and it favors its properties over everyone else’s,” said Mr. Reback, sitting in a Washington cafe with the couple. “What it wants to do is control Internet traffic. Anything that undermines its ability to do that is threatening.”

Move over, ISPs! Search engines are the real threat! Somehow, I feel fairly confident in predicting that this will be among the chief implications of Tim Wu’s new book, The Master Switch: The Rise and Fall of Information Empires, to be released in November, which his publisher summarizes as follows: Continue reading →

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PFF Hill Briefing 5/24 @ Noon: Nuts & Bolts of Online Privacy, Advertising, Notice & Choice

by on May 17, 2010 · 1 comment

In light of the discussion draft of privacy legislation recently released by Chairman Rick Boucher (our comments here and here), PFF is holding a special “Nuts & Bolts” luncheon briefing on the technical underpinnings of the ongoing privacy policy debate on Monday, May 24, 2010, 12-2 p.m. in 2123 Rayburn House Office Building.

Our panel of distinguished experts will provide an overview of the technical mechanics of online advertising and associated concerns about data collection, and discuss challenges and opportunities for empowering privacy-sensitive consumers to manage their online privacy without breaking the advertising business model that sustains most Internet content and services. I’ll moderate a terrific panel:

To Register: Space is limited, so an RSVP is required to attend.  Please register online here. Event questions should be addressed to Adam Marcus at amarcus@pff.org.  Media inquiries should be directed to Mike Wendy at mwendy@pff.org.

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PFF TechCast: Concerns about the Boucher-Stearns Privacy Bill

by on May 16, 2010 · 1 comment

Adam Thierer & I offered our initial thoughts upon first reading the discussion draft of the privacy bill introduced by Rep. Rick Boucher (D-VA) & Cliff Stearns (R-FL). In PFF’s latest TechCast, I sat down to discuss the bill and my concerns about it with PFF’s VP for Communications, Mike Wendy:

Stay tuned for more from us on this. PFF plans to file written comments, as solicited by the bill’s authors, by June 4. For more on this, check out our comments to the FTC last December on these issues.

Subscribe now to PFF’s TechCast podcast (generally 5-8 minutes) by RSS or through iTunes!

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What’s Yours is Mine: The Dangerous Implications of a “Right” to Free Credit Scores

by on May 4, 2010 · 12 comments

I’m recuperating today after wrist surgery #2 but I just had to say something about a hugely important proposal introduced today that would bring us one step closer to information socialism. No, I’m not talking about the discussion draft privacy bill released today by Reps. Boucher & Stearns (which Adam and I already commented on here) but about the amendment introduced today by Sen. Udall that would “require credit-rating agencies to divulge credit scores, free of charge, to consumers when they access their free annual credit report.”

Actually, there is an important analogy between the two bills: both will have populist appeal because they can claim to giving consumers a “right” to “their” information—but both would impose real costs that will ultimately be borne by consumers. On the privacy side, Adam Thierer and I have warned repeatedly that data collection is critical to the online advertising that supports the publishers of the Internet’s cornucopia of content and services. Everyone takes this for granted but few of us really think about the quid pro quo at work: users receive “free” content and services in exchange for seeing advertising and sharing data about their browsing habits, which makes advertising more relevant to them, more effective for advertisers, and therefore more profitable for publishers.

Unfortunately, a similar free lunch mentality is at work with credit scores. If we think about them at all, most of us probably resent and/or fear them. Yet credit scores, and the entire credit reporting system, are truly one of the wonders of information capitalism and a boon for consumers. Before they developed, lending decisions were far riskier because lenders didn’t really know whom to trust with their money. Thus they had to build in a risk premium into their interest rates to account for the fact that some users might default or fall behind on payments. This punished good borrowers and rewarded bad ones. Getting a loan was difficult, often required special connections, and was often arbitrary and thus sometimes downright discriminatory.

This situation was bad for everyone. While nobody likes being in debt, we often forget how radically empowering credit can be in allowing us to expand our opportunities in life. Continue reading →

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Statement on House Privacy Discussion Draft

by on May 4, 2010 · 11 comments

Today, the House Committee on Energy and Commerce, Subcommittee on Communications, Technology and the Internet, released its long-awaited online privacy bill discussion draft, requiring that users opt-in to certain types of online data collection. Berin Szoka and I issued the following statement in response:

By mandating a hodge-podge of restrictive regulatory defaults, policymakers could unintentionally devastate the “free” Internet as we know it. Because the Digital Economy is fueled by advertising and data collection, a “privacy industrial policy” for the Internet would diminish consumer choice in ad-supported content and services, raise prices, quash digital innovation, and hurt online speech platforms enjoyed by Internet users worldwide.

Before imposing prophylactic regulation, policymakers should first identify specific consumer harm that requires government intervention. They should next ask whether there are less restrictive alternatives to regulation, such as enhancing enforcement of existing laws, bolstering limitations on government access to online data, education efforts about online privacy, and promoting the development and uptake of technological empowerment solutions that allow users to manage their own privacy preferences.

Continue reading →

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Google-AdMob, Antitrust, and Innovation

by on April 29, 2010 · 4 comments

The Federal Trade Commission is reportedly on the verge of suing to block Google’s proposed acquisition of mobile advertising firm AdMob. The deal’s antitrust implications were discussed in a panel earlier this month on Capitol Hill featuring Berin Szoka. (For other interesting perspectives on the topic, see Geoff Manne and Tom Lenard).

In an opinion essay on Forbes.com this week, I argue that the FTC should approve Google’s acquisition of AdMob without conditions:

FTC Should Green-light Google AdMob Deal

by Ryan Radia

Google competes in many markets, but its most pressing threat comes not from a rival but from antitrust authorities. The Federal Trade Commission is reportedly on the verge of filing a lawsuit against Google to block its proposed $750 million acquisition of mobile advertising company AdMob. Yet antitrust fears about Google are misplaced. Government intervention would harm the very consumer interests the FTC is supposed to protect.

As the government prepares for a potential court battle against Google, the budding mobile advertising market is evolving before our very eyes. Just two weeks ago Apple launched iAd, a mobile advertising platform aimed at the world’s 50 million iPhone users. And Microsoft is in talks to acquire Millenial Media, another major player in mobile advertising, according to Business Insider.

Meanwhile, smart phone use is increasing rapidly–and opportunities for entry in the mobile advertising market are increasing with it. Can Google, armed with AdMob’s advertising platform, succeed in gaining the top spot in mobile advertising? Perhaps — but only if Google-AdMob manages to outcompete and out-innovate rivals that have deep pockets and brilliant engineers of their own.

What tomorrow’s mobile ad market will look like if Google and AdMob join forces is anybody’s guess. Trying to predict how a proposed merger or acquisition will impact consumers is difficult, if not impossible.

Continue reading →

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My Senate Testimony on the Children’s Online Privacy Protection Act (COPPA)

by on April 29, 2010 · 3 comments

I’m testifying this morning before the Senate Commerce Committee’s Consumer Protection Subcommittee on Examining Children’s Privacy: New Technologies and the Children’s Online Privacy Protection Act at 10 am in 253 Russell. I offered an overview of my testimony in a PFF TechCast interview yesterday.

MP3 file: PFF TechCast #4 – Senate COPPA testimony of Berin Szoka

My pre-scripted oral testimony (PDF) follows below, but you can download my somewhat longer written testimony here, which offers an overview of our past work on this subject at PFF, particularly the paper Adam Thierer and I published last summer COPPA 2.0: The New Battle over Privacy, Age Verification, Online Safety & Free Speech.

________________________

Mr. Chairman and Committee members, thank you for inviting me here today.  My name is Berin Szoka.[1] I’m a Senior Fellow at The Progress & Freedom Foundation.  I commend this Committee for studying COPPA, and the FTC for its upcoming COPPA Review and Roundtable.[2]

Background on COPPA

For an “Internet Jr.” of sites “directed at” children under 13, COPPA requires sites either to age-verify all users or limit functionality to prevent children from making personal information “publicly available”—including the sharing of user-generated content.  COPPA imposes the same requirement on general audience sites when they have actual knowledge a user is under 13.  Because of this forced separation and the costs of age verification, COPPA may well have unintentionally limited choice and competition by driving increased consolidation in the marketplace for child-oriented sites and services online.  On the other hand, COPPA has been reasonably successful in fulfilling Congress’s original goal of “enhancing parental involvement” to protect children’s online privacy and safety.

Whatever this trade-off, I’m here today to caution against expanding COPPA beyond its original, limited purpose. COPPA’s unique value lies in its flexibility, subtlety, and intentional narrowness. Continue reading →

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Senators Unfairly Target Facebook

by on April 28, 2010 · 9 comments

Facebook is in the spotlight—unfairly.

Yesterday, four Democratic U.S. senators — Charles Schumer (D-N.Y.), Michael Bennet (D-Col.), Mark Begich (Alaska) and Al Franken (D-Minn.) — published a letter to Facebook expressing their concern over Facebook’s privacy policies.  They asked Facebook to “fix” its privacy policy?

Privacy is a complex and often personal concept – how do these four senators know it’s broken?

Well, the letter follows the announcement of Facebook’s new Open Graph API that could revolutionize social networking. As one commentator wrote on ReadWriteWeb, “the bits of this platform bring together the visions of a social, personalized and semantic Web that have been discussed since del.icio.us pioneered Web 2.0 back in 2004.” The future of the web is not just knowing whether a user is interacting with a webpage, but knowing whether users are liking a specific kind of thing (referred to as the semantic web).

This sounds like very interesting stuff (understatement intended). And here’s the thing that many people (including many members of Congress) forget:  Facebook is a new model of business that has shaken up the way we communicate. And it’s operating in uncharted territory, miles ahead of the Washington, D.C. crowd that would like to put their own stamp on the company. This is a company that is driving innovation, the last thing we need are politicians attempting to fine-tune the engine.

Which company is the next target of a letter? What’s the precedent being set by these demands for Facebook and other innovative web-based companies? I imagine there are a lot of concerned entrepreneurs across the country wondering if they’re next.

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