Today, Berin Szoka and I both testified at the first of three Federal Trade Commission workshops on “Exploring Privacy.” Today’s all-day event featured 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. Our TLF co-blogging colleague Jim Harper also testified on the first panel of the day on “Benefits and Risks of Collecting, Using, and Retaining Consumer Data.” I was on the second panel of the day on “Consumer Expectations and Disclosures.” And Berin was on the third panel on “Online Behavioral Advertising.” The fourth panel was on “Information Brokers” and the fifth panel was on “Exploring Existing Regulatory Frameworks.” On my panel, we discussed the usefulness of privacy polls and surveys. I attempted to make a few simple points when asked for my opinions:
- While privacy polls and surveys may offer us some interesting insights into how some in the public think about advertising and privacy in the abstract, ultimately, they are no substitute for real-world experiments in which people make real choices, in real time, often with real money, and face many real trade-offs. [See this paper.]
- Moreover, such polls and surveys fail to account for the fact that consumers are empowered with real privacy controls so they can make the privacy choices that are right for them, rather than a one-size-fits-all choice imposed by someone else. [See this ongoing series and this paper.]
- (1) & (2) are especially the case since privacy is a highly subjective condition. [See this paper by Jim Harper.]
- It remains unclear what the harms are that we are trying to protect consumers against. [See this paper and this blog post.]
- Because of (1), (2), (3), and (4) we need to understand that rational ignorance may often be at work here. Many consumers likely won’t feel the need to read privacy policies or take steps to “protect their privacy” online.
Continue reading →
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 →
The Internet is massive. That’s the ‘no-duh’ statement of the year, right? But seriously, the sheer volume of transactions (both economic and non-economic) is simply staggering. Consider a few factoids to give you a flavor of just how much is going on out there:
- In 2006, Internet users in the United States viewed an average of 120.5 Web pages each day.
- There are over 1.4 million new blog posts every day.
- Social networking giant Facebook reports that each month, its over 300 million users upload more than 2 billion photos, 14 million videos, and create over 3 million events. More than 2 billion pieces of content (web links, news stories, blog posts, notes, photos, etc.) are shared each week. There are also roughly 45 million active user groups on the site.
- YouTube reports that 20 hours of video are uploaded to the site every minute.
- Amazon reported that on December 15, 2008, 6.3 million items were ordered worldwide, a rate of 72.9 items per second.
- Every six weeks, there are 10 million edits made to Wikipedia.
Now, let’s think about how some of our lawmakers and media personalities talk about the Internet. If we were to judge the Internet based upon the daily headlines in various media outlets or from the titles of various Congressional or regulatory agency hearings, then we’d be led to believe that the Internet is a scary, dangerous place. That ‘s especially the case when it comes to concerns about online privacy and child safety. Everywhere you turn there’s a bogeyman story about the supposed dangers of cyberspace.
But let’s go back to the numbers. While I certainly understand the concerns many folks have about their personal privacy or their child’s safety online, the fact is
the vast majority of online transactions that take place online each and every second of the day are of an entirely harmless, even socially beneficial nature. I refer to this disconnect as the “problem of proportionality” in debates about online safety and privacy. People are not just making mountains out of molehills, in many cases they are just making the molehills up or blowing them massively out of proportion. Continue reading →
My March 2008 paper, Franz Kafka’s Solution to Illegal Immigration, detailed the problems with electronic employment verification systems. The paper concludes that successful “internal enforcement” of immigration law requires a national ID—and ultimately a cradle-to-grave biometric tracking system.
The Department of Homeland Security has started a program called the “I E-Verify” campaign for businesses that use the federal background check system on its employees. If you see businesses with “I E-Verify” decorations or insignia, they at least indirectly support a national ID system in the United States. This can help you decide whether or not you want to spend your dollars with them.
Adam has done yeoman’s work for years pointing out, and arguing against, the phenomenon of techno-panic as it relates to children. That’s not the only area in which techno-panic can tighten its grip on the neck of common sense and the constitution, of course.
But here’s a delight I ran across this morning: the
Los Angeles Times arguing against techno-panic despite the use of Web sites to research and case potential burglary victims (by the “bling ring,” soon to be the subject of a major motion picture).
The
Times editorializes:
[T]hieves [did not] have to wait for the invention of Google maps to reconnoiter neighborhoods in search of easily accessible homes. That’s worth remembering if, as we fear, some legislator decides that a law should be passed to prevent Internet surfers from looking at houses they easily could scope out from the sidewalk. . . . . A law against photographing a home or what occurs outside it in plain sight — or disseminating the images to others — would be overreaching, not to mention unconstitutional.
What a delight—a major newspaper arguing to keep a hot issue in perspective and citing the constitution as a limit on government power! Thank you,
L.A. Times.
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 →
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 →
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