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 →
Free Press, the radical pro-regulatory media activist group, recently filed comments with the Federal Trade Commission (FTC) for the agency’s upcoming workshop on “How Will Journalism Survive the Internet Age?” The Free Press comments provide an enlightening glimpse into the mind of how many on the Left now think about media policy in America. Their approach can be summarized as follows:
- Nothing the private sector can do will save journalism (unless it is entirely non-profit / non-commercial in nature);
- Even if there was something that private players could do to save journalism, Free Press would likely have federal authorities forbid it anyway (especially if it involved new business ownership patterns or combinations); and,
- The only thing that can really save journalism is a “public option” for the press in the form of massive state subsidization of media in this country.
To elaborate on the last point, here’s how Free Press summarizes what they are looking for:
For U.S. public media to become a truly world-class system will require a substantial increase in funding. This could be accomplished by an increase in direct congressional appropriations to the Corporation for Public Broadcasting. With increased funding — to as little as $5 per person, increasing annual appropriations to some $1.5 billion — the American public media system could dramatically increase its capacity, reach, diversity and relevance.
But they stress that a simple expansion of the PBS/NPR/CPB non-commercial model will not be enough since that system is “vulnerable to repeated threats of funding cuts” and too “reliant on corporate backing, via the underwriting process.” They want to go well beyond
non-commercial media, therefore, and have the state start building a massive public media infrastructure. Here’s where their pitch for a public option for the press comes in: Continue reading →
OnGuardOnline.gov is a project of a dozen federal agencies and several private child safety organizations who have collaborated to create a website which “provides practical tips from the federal government and the technology industry to help you be on guard against Internet fraud, secure your computer, and protect your personal information.” The Federal Trade Commission (FTC) is particularly instrumental in maintaining and promoting the site but it works closely with those other agencies and organizations to craft messages and programs.
OnGuardOnline has just released a terrific new online safety resource called
Net Cetera: Chatting with Kids about Being Online. This 54-page document is an outstanding resource for parents. The report’s advice and recommendations are spot on across the board and I particularly want to highlight the important section right at the front of the document entitled, “Talk to Your Kids.” It begins: “The best way to protect your kids online? Talk to them. Research suggests that when children want important information, most rely on their parents.” Quite right. And the NetCetra report goes on to offer the following excellent advice:
- Start early. After all, even toddlers see their parents use all kinds of devices. As soon as your child is using a computer, a cell phone or any mobile device, it’s time to talk to them about online behavior, safety, and security. As a parent, you have the opportunity to talk to your kid about what’s important before anyone else does.
- Create an honest, open environment. Kids look to their parents to help guide them. Be supportive and positive. Listening and taking their feelings into account helps keep conversation afloat. You may not have all the answers, and being honest about that can go a long way.
Continue reading →
Another great column by the Wall Street Journal’s Gordon Crovitz, who is quickly becoming my favorite tech policy columnist. In today’s column, “Bloggers Mugged by Regulators,” he comments on the FTC’s new disclosure rules for bloggers, which I discussed here over the weekend. Crovitz focuses on the enforcement challenges associated with the new rules and also argues that self-regulation should be given a chance to work:
There should be more disclosure, but the Web is different from earlier media in ways that make government regulation less relevant and practical. The Web has its own self-regulatory mechanisms. Failing to disclose interests sullies one’s reputation online, and reputation harm travels faster and lasts longer than it did before the Web.
There’s also greater need for caveat emptor online, because there is no practical way that any government agency can monitor the world’s bloggers and posters. There will always be people who post comments about products and services that are self-serving in one way or another, at least by someone’s definition. […]
Instead of trying to extend analog-era regulations onto the Web, the FTC should encourage readers to be vigilant about assessing for themselves the independence of sources online. At least we now know the biggest fraudulent claim so far on the Web: It’s been committed by regulators claiming there can be a government stamp of approval on everything anyone posts anywhere on the Web.
Amen brother.
Three cheers for Randall Rothenberg, President and Chief Executive Officer of the Interactive Advertising Bureau (IAB) for having the guts to send this splendid open letter to Federal Trade Commission (FTC) Chairman Jon Leibowitz about the agency’s new disclosure rules for bloggers. Rothenberg’s entertaining and brutally honest letter is a rarity for a trade association chief. Most of the time trade associations fall all over themselves to whisper sweet-nothings in the ears of regulators, even when those regulators are out to crush the industries in question. But Rothernberg doesn’t pull any punches in his letter to Chairman Leibowitz. After walking through some of the stunning ambiguities of the rules, such as how much “weight consumers give to [a] review” by a blogger who might have a commercial sponsor, Rothenberg asks:
With all due respect, Mr. Chairman: Huh? Does the FTC really intend to probe America’s opinion-mongering apparatus this closely? Do you have a team of Freuds and Jungs able to examine “the weight” consumers give such opinion – and the way they weigh that weight?
Naturally, this expedition from Oceania – that’s the place Big Brother ruled – should be worrisome to all Americans, and to all viewers, readers, listeners, users, and providers of any communications medium. But for the 400 members of the Interactive Advertising Bureau, most of which are small and medium-sized enterprises struggling to build their businesses in the face of the worst decline in marketing spending since the 1930’s, the implication that online social media represent a separate class of communications channels with less Constitutional protection than corporate-owned newspapers, radio stations, or cable television networks is of particularly grave concern.
They – and we — are not arguing that bloggers and social media be treated differently than incumbent media. After all, most newspapers, magazines, radio stations and television networks, in recognition that Americans are embracing new forms of social communications, have established their own blogs, boards, Facebook pages, Twitter feeds, and the like. Rather, we’re saying the new conversational media should be accorded the same rights and freedoms as other communications channels.
Yep, exactly right and it echoes the questions I’ve raised here before. And his letter just gets better from there regarding the enforcement nightmare presented by these ambiguous rules:
Continue reading →
Like James Gattuso, I have a lot of questions about the Federal Trade Commission’s new “Guides Concerning the Use of Endorsements and Testimonials in Advertising,” especially as they apply to bloggers. (And over at Silicon Angle, Mark ‘Rizzn’ Hopkins has been doing a great job keeping tabs on the many questions and hypothetical situations that others have been posing about the new rules). But the one thing I just can’t wrap my head around is how the FTC plans to enforce these rules against those speakers or media outlets who have print publications which are fully protected by the First Amendment. So, I was pleased to see my favorite press critic Jack Shafer of Salon, ask the same question in his latest column on “The FTC’s Mad Power Grab”:
Because of a pesky thing called the First Amendment, the guidelines don’t apply to news organizations, which receive thousands of free books, CDs, and DVDs each day from media companies hoping for reviews. But if the guidelines don’t apply to established media like the New York Review of Books, which also happens to publish reviews on the Web, why should they apply to Joe Blow’s blog? Regulating bloggers via the FTC while exempting establishment reporters looks like a back-door means of licensing journalists and policing speech.
Exactly. Is the FTC just going to ignore such speakers or media organizations but enforce against everyone else? Isn’t that just a bit silly and radically unfair? Moreover, might such a policy end up incentivizing some folks to create token print publications to get around such the regulations? I doubt it, but you never know.
Regardless, as Shafer notes, the rules are so hopelessly open-ended and arbitrary that they are bound to pose problems for whomever they are enforced against: Continue reading →
Should the federal government regulate what blogger’s blog? Yes, said the Federal Trade Commission yesterday — at least when it comes to product endorsements.
At issue were the FTC’s guidelines concerning the use of endorsements in advertising. These guidelines, among other things, require paid endorsers of products to disclose their relationships with advertisers. The goal is a good one, to prevent deception and fraud. In practice, the lines are hard to draw — what exactly is an endorsement? What constitutes payment? It gets even harder in today’s world of user-generated media, in which much advertising is by consumers themselves on blogs and elsewhere, sharing recommendations and opinions on just about everything. Continue reading →
The Federal Trade Commission (FTC) has just announced it will be hosting:
a series of day-long public roundtable discussions to explore the privacy challenges posed by the vast array of 21st century technology and business practices that collect and use consumer data.” Such practices include social networking, cloud computing, online behavioral advertising, mobile marketing, and the collection and use of information by retailers, data brokers, third-party applications, and other diverse businesses. The goal of the roundtables is to determine how best to protect consumer privacy while supporting beneficial uses of the information and technological innovation. The roundtable discussions will consider the risks and benefits of information collection and use in online and offline contexts, consumer expectations surrounding various information management practices, and the adequacy of existing legal and self-regulatory regimes to address privacy interests.
The first of these roundtables will be held on December 7, 2009 at the FTC Conference Center in Washington, D.C. Additional information can be found here.
I’m sure my colleague Berin Szoka will have much more to say about this in coming days and weeks — and I very much hope the FTC will invite him in to testify — but, for now, I just want to reiterate the three key challenges we have been posing again and again and again and again in all our work on this subject:
- Identify the harm or market failure that requires government intervention.
- Prove that there is no less restrictive alternative to regulation.
- Explain how the benefits of regulation outweigh its costs.
I hope those issues are front and center at these workshops and we get some firm answers because the dangers of breaking the very few Internet business models that actually work is a very steep price to pay for the conjectural harms bandied about by some privacy zealots.
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.
On July 27th, The Progress & Freedom Foundation hosted a Capitol Hill panel discussion entitled “Online Child Safety, Privacy, and Free Speech: An Overview of Challenges in Congress & the States.” The event featured remarks from:
- Parry Aftab, Executive Director, WiredSafety.org
- Todd Haiken, Senior Manager of Policy, Common Sense Media
- Jim Halpert, Partner, DLA Piper
- Berin Szoka, Senior Fellow, The Progress & Freedom Foundation
We’ve just released the transcript of the event, which I have also pasted down below the fold in a Scribd document reader. Also, the audio for this event can be heard by clicking below:
Download mp3
Here is the full event description: Continue reading →
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