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Browsers Go After ‘Tracking’

by on December 19, 2010 · 4 comments

Advocates of regulation will credit regulators for the fact that major browser providers Microsoft and Mozilla are going after online “tracking.” In forthcoming versions of their browsers, they will provide controls that protect against unwanted monitoring even better than the controls that now exist.

When consumer advocates cluster in Washington, D.C., asking federal agencies to solve consumer issues, of course, any progress on the issues will be credited to the threat of coercion. But experiments like these have no controls.

Decisions about the qualities of goods and services are made out at the leading edge of consumer demand, where producers work to anticipate developing public interests. Meeting demand after it has been realized is a recipe for business failure because competitors getting there before the others win market share and profits. Laggards are losers.

You can tell when regulators push for something that does not match up with consumer demand as perceived in the business sector. The regulators get nowhere. That would be the FTC’s call a decade ago for a suite of regulations requiring “notice, choice, access, and security.” The current push for “tracking” controls does appear to meet up with consumer demand, and, again, the browser providers are working on it years ahead of what any regulation would have required.

I’ve put “tracking” in scare quotes because the open question is just what anyone means by the word. The report linked above notes a comment from Google, provider of the Chrome browser:

“The idea of ‘Do Not Track’ is interesting, but there doesn’t seem to be consensus on what ‘tracking’ really means, nor how new proposals could be implemented in a way that respects people’s current privacy controls,” said the company…

Maybe Google will be the laggard and loser for not moving on “tracking” as fast as its competitors. That’s one approach, while Microsoft and Mozilla will each take a different tack to the problem. The result will be an experiment that does have controls. The browser provider that meets up with consumer interests, in the consumer-friendliest way, wins. Such would not be the case if a federal regulation—yes, one-size-fits-all—determined what “tracking” was and how browsers or others would provide protection against it.

Marketplace competition will do better than any other known method for determining what “tracking” means to consumers and what to do about it. There is no privacy advocate, there is no technologist, no advocacy group, nor academic who knows what to do here.

The one thing I recommend is that do-not-track efforts should control the content of the header and the domains the browser communicates with. Simply putting a “do-not-track” signal in the header would punt the problem back to regulators and the cadre that surrounds them. This group would come up with something that satisfies itself, the regulatory community, but that does not digest and reconcile actual consumers’ competing interests in privacy, convenience, access to content, and so on.

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Thoughts on Wu’s Master Switch, Part 6 (His Audacious Information Industrial Policy)

by on November 2, 2010 · 602 comments

I’m going to close out my series of essays about Tim Wu’s new book, The Master Switch: The Rise and Fall of Information Empires, by discussing his proposed solutions.  In the first five essays in the series, [1, 2, 3, 4, 5] I’ve critiqued Wu’s look at information history as well as his use of terms like “market failure,” “laissez-faire” and “open” vs. “closed.”  I argued there’s a great deal of over-simplification, even outright distortion, in his use of those terms throughout the book.

Anyway, let’s run through the basics of the book once more before getting to Wu’s proposed solutions.  By my reading of The Master Switch, Wu’s argument essentially goes something like this:

  • Information industries go through cycles. After a period of “openness” and competition, they tend to drift toward “closed,” corporate-controlled, anti-consumer models and outcomes.
  • The resulting “monopolists” then block much innovation, competition, and free speech.
  • Consequently, “the purely economic laissez-faire approach… is no longer feasible.”
  • Moreover, information industries are more important than all others (“information industries… can never be properly understood as ‘normal’ industries”) and even traditional forms of regulation, including antitrust, “are clearly inadequate for the regulation of information industries.” (p. 303).
  • Thus, special rules should apply to information-related sectors of our economy.

Again, I’ve challenged some of these assertions in my previous essays, specifically, Wu’s incomplete history of cycles and the fact that he greatly underplays the role of governments in “locking-in” sub-optimal market structures or, worse yet, creating those structures through misguided public policies or regulatory capture.  Wu discusses some of those factors in his book, but he tends to regard them as secondary to the inquiry, whereas I believe they are crucial to understanding how most “closed” or anti-competitive scenarios develop or endure. Instead, Wu simplistically suggests that “the purely economic laissez-faire approach… is no longer feasible,” even though no such state of affairs has ever existed within communications or media industries. They have been subjected to varying levels of indirect influence or direct control almost since their inception.

Regardless, what does Tim Wu want done about the problems he has (mis-)diagnosed? Continue reading →

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Thoughts on Tim Wu’s Master Switch, Part 2 (On “Cycles” & “Market Failure”)

by on October 26, 2010 · 10 comments

Tim Wu was kind enough to comment on my general overview and critique of his new book, The Master Switch: The Rise and Fall of Information Empires.  That essay will be the first of many I plan to pen about Wu’s important book.  I appreciate Prof. Wu being willing to engage me in a debate over some of these issues since I’m sure he has better things to do with his time. Some of the points he raised in his comment will be addressed in subsequent posts.

In this post, I want to respond briefly to his assertion that I was “missing the point of the book” which is “to describe the world we live in.” He says that his book, “suggests that we tend to go through open and closed cycles in the Information Industries, and that, roughly, both have their strengths and weaknesses, and both become popular at different times for various reasons.”  But he fears there are “greater risks in the closed periods.”

Contrary to what he suggests, I certainly understand that’s the point of his book, it’s just that I don’t fully agree with his analysis or conclusions. Let me be clear about a crucial point, however: I accept that almost every industry goes through “cycles” of some sort and that, typically, after a “Wild West” period of greater “openness” and more atomistic competition, some degree of “consolidation” or more “closed” (or proprietary) models often sets in.  (A somewhat different and far more descriptive interpretation of such cycles can be found in Deborah Spar’s 2001 book, Ruling the Waves: Cycles of Discovery, Chaos, and Wealth from Compass to the Internet. She outlines a more refined 4-part cycle of: Innovation, Commercialization, Creative Anarchy, and Rules.)

My primary beef with Prof. Wu is that, contrary to his assertion yesterday in commenting on my post, his book seems to regard the progression of “the Cycle” as mostly linear and one-directional: straight down toward a perfectly closed, corporate-controlled, anti-consumer Hell.  By my reading of his book – much like Lessig and Zittrain’s work – Wu is painting an overly pessimistic portrait of technologies being subjected to the “perfect control” of largely unfettered markets.

I believe history – especially recent history — teaches us something very different.  Continue reading →

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Privacy Isn’t Dead, It’s Evolving

by on August 19, 2010 · 0 comments

Recent revelations about Microsoft’s internal debate over Internet Explorer’s handling of tracking cookies, as chronicled by The Wall Street Journal earlier this month, have prompted harsh criticism from self-described privacy groups, who’ve called on Congress to investigate Microsoft’s actions. But as Jim Harper pointed out in an excellent WSJ essay, Web users stand to lose a great deal if online tracking is squelched by the hand of government. Data gathering on the Internet is largely harmless, and individually targeted advertising coexists with robust privacy safeguards.

Over on AOLNews.com, my colleague Carolyn Homer discusses these privacy tradeoffs, arguing that Microsoft and other Internet firms have a strong incentive to set privacy defaults that align with their users’ preferences. She points out that most consumers are, in practice, quite willing to live with allegedly “pervasive” tracking in exchange for the enormous benefits that targeted advertising makes possible. While many surveys and polls indicate consumers are very worried about their privacy, the actual decisions that consumers make every day tell a very different story (as documented extensively by Berin Szoka). From Carolyn’s piece:

A body of research reveals a sizable disparity between how much people say they value privacy and how willing they are to actually protect it. In a 2003 Duke Law Journal article, Michael Staten and Fred Cate found that fewer than 10 percent of users exercise their right to opt out and share less. Conversely, if given the opposite choice, fewer than 10 percent of users elect to opt in and share more. The vast middle is apparently indifferent. If consumers were required to affirmatively opt in before sharing data, the Internet’s prevailing advertising-based business model would be decimated. The effectiveness of online advertising in Europe, for example, fell 65 percent after the European Union in 2002 required a blanket opt-in system. For more than a decade, the Internet has thrived on the assumption that most people believe it is a fair trade to receive free content in exchange for viewing ads. Mere advertisements shouldn’t be equated with gross privacy violations.

She goes on to discuss how privacy settings are evolving as consumer preferences adapt to new technologies and firms experiment with new ways to use and collect data. You can read the rest over at the AOL News website.

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The Seven Deadly Sins of Title II Reclassification (NOI Remix)

by on July 13, 2010 · 4 comments

Better late than never, I’ve finally given a close read to the Notice of Inquiry issued by the FCC on June 17th.  (See my earlier comments, “FCC Votes for Reclassification, Dog Bites Man”.)  In some sense there was no surprise to the contents; the Commission’s legal counsel and Chairman Julius Genachowski had both published comments over a month before the NOI that laid out the regulatory scheme the Commission now has in mind for broadband Internet access.

Chairman Genachowski’s “Third Way” comments proposed an option that he hoped would satisfy both extremes.  The FCC would abandon efforts to find new ways to meet its regulatory goals using “ancillary jurisdiction” under Title I (an avenue the D.C. Circuit had wounded, but hadn’t actually exterminated, in the Comcast decision), but at the same time would not go as far as some advocates urged and put broadband Internet completely under the telephone rules of Title II.

Continue reading →

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The Lingering Costs of the Antitrust Crusade Against Microsoft: Tool Opt-Ins v. Metcalfe’s Law

by on June 10, 2010 · 5 comments

Great piece by ZDNet’s Edd Bott on How a decade of antitrust oversight has changed your PC. Here are his four categories of costs:

  1. Thanks for all the crapware, Judge
  2. Competition among browsers? It took a long, long time
  3. You’re less safe online.
  4. You want software with that OS? Go download it.

He explains his points brilliantly, so it’s well worth reading the article. On point #3. Bott notes:

Microsoft Security Essentials is available to any Windows PC as a free download, but it’s still not available as part of Windows itself. The Windows 7 Action Center will warn you if you don’t have antivirus software installed, but clicking the Find a Program Online button takes you to this page, where Microsoft’s free offering is one of 23 options, most of which are paid products…. I think the mere threat of an antitrust complaint from a big opponent like Symantec or McAfee has been enough to make Microsoft shy away from doing what is clearly in its customers’ best interests. Although Microsoft Security Essentials is free, it’s not included with Windows. And ironically, even though Microsoft’s offering is free and gets excellent reviews, you’re unlikely to find it on a new PC. Why? Because those competitors who sell antivirus software actually  pay PC makers to preload their products, banking, literally, on the fact that a significant percentage of them will pay for an annual subscription.

It’s worth pointing out that there are three possible costs to consumers here: Continue reading →

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More Zittrainian Nonsense about “The Death of the Open Web”

by on May 23, 2010 · 0 comments

Since Jonathan Zittrain’s ideas about the “generativity” have permeated the intellectual climate of technology policy almost as thoroughly as those of Larry Lessig, scarcely a month passes without a new Chicken Little shouting about how the digital sky is falling in a major publication. The NYT has had not one, but two such articles in the course of a week: first, Brad Stone’s piece about Google, Sure, It’s Big. But Is That Bad? (his answer? an unequivocal yes! as I noted), followed by Virginia Heffernan’s piece “The Death of the Open Web,” which bemoans the growing popularity of smart phone apps—which she analogizes to “white flight” (a stretched analogy that, I suppose, would make Steve Jobs the digital Bull Connor).

What really ticks me off about these arguments (besides the fact that Apple critics like Zittrain use iPhones themselves without a hint of bourgeois irony) is Heffernan’s suggestion that, “By choosing machines that come to life only when tricked out with apps from the App Store, users of Apple’s radical mobile devices increasingly commit themselves to a more remote and inevitably antagonistic relationship with the Web.” To hear people like Heffernan (and others who have complained about Apple’s policies for its app store) talk, you might think that modern smart phones don’t come with a web browser at all, or that browser software is next to useless, so the fact that browsers can access any content on the web (subject to certain specific technical limitations, such as sites that use Flash) is irrelevant, and users are simply at the mercy of the “gatekeepers” that control access to app stores.

In fact, the iPhone and Android mobile browsers are amazingly agile, generally rendering pages originally designed for desktop reading in a way that makes them very easy to read on the phone—such as by wrapping text into a single column maximized to fit either the landscape or portrait view of the phone, depending on which way it’s pointed.  In fact, I do most of my news reading on my Droid, and using its browser rather than through any app—although there are a few good news apps to choose from. In fact, I probably spend about 10 times as much time using my phone’s browser as I spend using all other 3rd party apps (i.e., not counting the phone, e-mail, calendar, camera and map “native” apps). So I can get any content I want using the phone’s browser, I certainly don’t lose any sleep at night over what I can or can’t do in apps I get through the app store. I’d love to see actual statistics on the percent of time that smartphone users spend using their mobile browser, as compared to third-party apps. Do they exist?

But however high that percentage might be, the important thing is that the smartphone browser offers an uncontrolled tool for accessing content, even if apps on that mobile OS do not. Continue reading →

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Gizmodo Shows Online Competition is Thriving: Microsoft v. Google v. Apple (and Others!)

by on April 18, 2010 · 2 comments

Check out this amazing map of the “Dogs of War” of online competition created by Gizmodo’s Shane Snow (view full size here):

For all the complaining about these three tech titans, they’re locked in fierce competition with each other. This chart doesn’t even mention other players in the vibrantly competitive online ecosystem, like Facebook, Yahoo!, Twitter, and countless others. Makes you want to go spend a weekend playing an endless game of Risk, Axis & Allies or Supremacy with your best frenemies, doesn’t it? But of course, the board game analogy only goes so far, because today’s battlelines and players are only a snapshot of a long-term process of dynamic, highly rivalrous competition. But as Adam and I noted in our Forbes.com piece last fall calling for quick approval of Microsoft’s search partnership with Yahoo!:

Alas, regulators seem stuck in the past. European officials in particular seem hell-bent on continuing the antitrust crusade of the ’90s against Microsoft, myopically focused on fading paradigms (desktop operating systems and Web browsers). But instead of narrowly defining high-tech markets based on yesterday’s technologies or market structures, policymakers should embrace the one constant of the Internet economy: dynamic, disruptive and irrepressible change. Continue reading →

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The EU Searches for a Monopolist, Finds Google

by on March 1, 2010 · 1 comment

Today’s The Wall Street Journal Europe published an editorial that Alberto Mingardi of Istituto Bruno Leoni and I penned about the competition complaints brought against Google in Europe.

The EU Searches for a Monopolist, Finds Google

If policy makers set the terms in a primitive year like 2010, nobody will have to respond to Google.

By WAYNE CREWS AND ALBERTO MINGARDI

Google isn’t a monopoly now, but the more it tries to become one, the better it will be for us all. Competition works in this way: Capitalist enterprises strive to gain in profits and market share. In turn, competitors are forced to respond by trying to improve their offerings. Innovation is the healthy output of this competitive game. The European Commission, while pondering complaints against the Internet search giant, might consider this point.

Google has been challenged by a German, a British, and a French Web site, for its dominant position in the market for Web search and online advertisement. The U.S. search engine is said to be imposing difficult terms and conditions on competitors and partners, who are now calling regulators into action. Google’s search algorithm is accused of being “biased” by business partners and competing publishers alike.

Before resorting to the old commandments of antitrust, we should consider that the Internet world is still largely impervious and unknown to anybody—including regulators. We are in terra incognita, and nobody knows the likely evolution of the market. But one thing is for sure: Online search can’t evolve properly if it’s improperly regulated—no matter the stage of evolution.

Continue reading →

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Are Digital Generativity and Openness Overrated?

by on February 23, 2010 · 2 comments

So, do I need to remind everyone of my ongoing rants about Jonathan Zittrain’s misguided theory about the death of digital generativity because of the supposed rise of “sterile, tethered” devices? I hope not, because even I am getting sick of hearing myself talk about it. But here again anyway is the obligatory listing of all my tirades: 1, 2, 3, 4, 5, 6, 7, 8 + video and my 2-part debate with Lessig and him last year.

You will recall that the central villain in Zittrain’s drama The Future of the Internet and How to Stop It is big bad Steve Jobs and his wicked little iPhone. And then, more recently, Jonathan has fretted over those supposed fiends at Facebook. Zittrain’s worries that “we can get locked into these platforms” and that “markets [will] coalesce [around] these tamer gated communities,” making it easier for both corporations and governments to control us.  More generally, Zittrain just doesn’t seem to like that some people don’t always opt for the same wide open general purpose PC experience that he exalts as the ideal. As I noted in my original review of his book, Jonathan doesn’t seem to appreciate that it may be perfectly rational for some people to seek stability and security in digital devices and their networking experiences—even if they find those solutions in the form of “tethered appliances” or “sterile” networks, to use his parlance.

Every once and awhile I find a sharp piece by someone out there who is willing to admit that they see nothing wrong with such “closed” platforms or devices, or they even argue that those approaches can be superior to the more “open” devices and platforms out there. That’s the case with this Harry McCracken rant over at Technologizer today with the entertaining title, “The Verizon Droid is a Loaf of Day-Old Bread.” McCracken goes really hard on the Droid — which hurts because I own one! — and I’m not sure I entirely agree with his complaint about it, but what’s striking is how it represents the antithesis of Zittrainianism:  Continue reading →

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