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February 11 2011

22:05

WSJ Series Inspires 'Do Not Track' Bill from Rep. Jackie Speier



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We didn't plan it this way, but the timing was perfect. Rep. Jackie Speier (D-Calif.) introduced a bill today in Congress that would give the FTC the power to create a "Do Not Track" database so people could opt out of online tracking. And her bill comes right during our special series about online privacy, which included a roundtable discussion (and debate) about the "Do Not Track" database and its feasibility. And Speier told me one of the inspirations for the bill was her outrage from reading the Wall Street Journal's What They Know series.

On one side is privacy groups such as Consumer Watchdog and the Electronic Frontier Foundation who worked with Speier on the bill. On the other side are behavioral ad firms and publishers who would prefer that massive numbers of people don't opt out from tracking, which helps them serve targeted ads. In the 5Across roundtable discussion, Yahoo's chief trust officer Anne Toth put it this way: "I think it's critical that people realize that collecting data about consumers online gives enormous benefits. Right now, advertising makes the Internet free. And people want a free Internet. And information leads to innovation and ideas. What I'm worried about most is that with 'Do Not Track' and government regulation, we throw out the baby with the bathwater and stifle innovation."

I talked with Rep. Speier today by phone and she wasn't buying that argument. She believes that the technology exists to create a one-button "Do Not Track" solution so people can opt out of tracking. Her bill is far from alone in the online privacy debate, as a flurry of bills are expected in Congress this year. Plus, she does not have a GOP co-sponsor on the bill nor is she a member of the House Energy and Commerce Committee. She still remains confident that the overwhelming public support for "Do Not Track" will give her bill momentum and she is "cautiously optimistic" she can get a GOP member to sign on.

The following is the entire audio of my interview with Speier this morning, and below is a transcript from that call.

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Q&A

Why did you decide the time was right to introduce this bill now?

Rep. Jackie Speier: I think there was a growing clamor for privacy protection by the public. For the longest time, we have operated with the ignorance of bliss, I guess, that nothing was going on. There have been a number of recent exposes that have made it clear that there's a lot of tracking going on. And I must tell you that until I read it in the Wall Street Journal, and their 13-part series, I didn't know that Dictionary.com was just a means by which tracking takes place. And they're using something like the dictionary to identify you and then to track you. I was pretty outraged when I read that.

What about self-regulation. A lot of companies in Silicon Valley would prefer to do it themselves. What do you think about those efforts?

Speier: I have a long history on the financial privacy side of this issue. We've had lots of efforts by the industry to offer up pseudo financial privacy protections in California when I was working on that legislation. I'm happy to see the industry step up, but I'm not interested in fig leaf solutions. I want it to be simple and straightforward for consumers to click on one button and not be tracked. I want the FTC to develop the mechanism, and a simple format so the consumer does not have to read 20 pages of legalese.

How would you define tracking? Because it's not as simple as the Do Not Call registry. There's tracking online that people see as being bad, using their information in bad ways, and there's tracking that's just analytics for a website and not really harmful.

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Speier: I think tracking is much more insidious than "Do Not Call." [Those telemarketing calls] were interrupting your dinner hour. Tracking is an activity that often times you don't even know it's going on. They're creating a secret dossier about who you are, they're making assumptions about you and then they're selling that information to third parties that then will market to you products or not, and then the information is then transferred from one source to another.

It starts to impact fundamental things like whether you can access health insurance, life insurance, what premium you're going to pay, based on assumptions they make. The example I used in the press conference today was I'm the chair of the refreshment committee of my church's bazaar so I go out and pay for 15 cases of wine and charge it to my credit card online. That information is then sold thousands of different ways to thousands of different data companies, and then it's sold again.

So let's say a life insurance company that I'd like to get life insurance from has that information and believes I'm an alcoholic. Either they don't sell me life insurance or charges me a higher premium. Or let's say I'm a prospective employee at a new company and they access this information and decide I'm an alcoholic and they don't want me as an employee. It becomes insidious.

I understand the worst-case scenarios, but what about the tracking that's done to give you recommendations on a site or you get ads that are served up that align with your interests? Some of those things aren't insidious or bad.

Speier: That's why you should have a choice. If you're going online to buy a new barbecue, you should be able to click to opt-in to see other barbecues. That's fine. That's your choice. But if you click on the target site, you know you want that barbecue and you don't want to be bothered and don't want to be tracked -- you can buy that barbecue and move on.

You talk about having one button to opt-out, but is that solution going to work or will people end up opting out of things they don't want to opt out of? Should there be more layers to this idea?

Speier: You'll still have advertisers seek you to opt in. The presumption is that somehow everyone is going to opt out. That's not necessarily the case. It's a choice.

What do you think about the solutions that the browsers have offered, from Microsoft's Internet Explorer, Mozilla Firefox and Google Chrome? Do you think what they're doing is a good start?

Speier: I think it's a good start, but I think we need something uniform. I've been told Mozilla's approach [with Firefox] is one that's not enforcing [Do Not Track] so what does that mean? It's more of a fig leaf at that point.

So it's more of a suggestion. "Don't track me... please."

Speier: [laughs] What is that? What it looks like to me is that they're trying to give the appearance that they're doing something, when they're not. I've been down this road before with the financial institutions in California with the financial privacy law. A placebo isn't going to work here.

I've heard from someone at Yahoo that the "Do Not Track" list could stifle innovation and the way they do behavioral advertising. And it could hurt not just Yahoo but startups as well.

Speier: I'm not persuaded by those arguments. That argument was used with the financial privacy law in California, that it would somehow stifle innovation of financial products. It didn't stifle innovation. Credit default swaps were out there for many to engage in. I'm just not buying it.

How will your bill differ from others that are being introduced? Are you coordinating with them in some way?

Speier: I'm hoping that we will coordinate. The bill from Bobby Rush (D-Ill.) is similar, though his would be site-specific. So every time you went to a site, you'd have to click, instead of a one-stop shop for purposes of opting out. My bill is more simplified and universal.

How will the bill dovetail with what's coming out from the FTC? They are in a comment period now, and they'll come out with a final report soon. Are you working with them?

Speier: First, I want to applaud the action they have taken, but we need to give them authority so they can move forward in a meaningful way in this area. They don't presently have the authority to do what we want them to do.

Part of your bill is giving them that authority?

Speier: Yes.

Did they ask for that?

Speier: No. They realize they need it in order to be effective in this area.

How long do you think it would take to implement what you're asking for in this bill?

Speier: I think the technology is already there. I think it should be as instantaneous as the Egyptian freedom. [laughs]

Within 18 days?

Speier: Yes, within 18 days. [laughing]

*****

What do you think about the "Do Not Track Me Online" bill? Would you sign up for such a database? Do you think the FTC should have the power to set up such a database? Share your thoughts in the comments below.

Mark Glaser is executive editor of MediaShift and Idea Lab. He also writes the bi-weekly OPA Intelligence Report email newsletter for the Online Publishers Association. He lives in San Francisco with his son Julian. You can follow him on Twitter @mediatwit.

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18:09

On Facebook and Online, Privacy Is Only an Illusion



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As our public selves merge perceptibly with our private selves on social networks, our notions of what constitutes privacy -- arguably even the very definition of privacy -- is undergoing a radical revision.

Mark Zuckerberg audaciously quipped in 2010 that privacy was no longer a social norm. For many of the 600 million-plus users of Facebook, the idea of a "private" profile apparently persists. Yet, there arguably is no such thing.

The Illusion of Privacy

Consider a recent study [PDF file] of online social networks by Northeastern's College of Computer and Information Science.

It started with this premise: Given the known attributes of some fraction of users in an online social network, can we infer the personal details -- geographic location, interests, and schools attended -- of the remaining users?

The conclusion was perhaps predictable: Yes.

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It was the high degree of accuracy that wasn't. Even when given information on as little as 20% of users, the personal attributes of the remaining users could be determined accurately an astonishing 80% of the time. (One sample graph from the study is at left.)

The study's findings align neatly with the formulation known as homophily and defined as love of the same, a term coined by sociologists more than half a century ago. Put more simply, we are friends with people like us.

And yet this natural grouping into tribes actually inhibits privacy. We can adjust our privacy settings on Facebook, cloaking our friend lists to "friends only" or "friends of friends," yet this is a fool's errand.

"Almost all privacy mechanisms available to users today are based on access control: users can specify which other users are able to view the content or information they upload," the researchers wrote. "Our results show, however, that even information that is not provided by users can sometimes be inferred from the user's location in the network."

In other words, our online networks reflect commonalities easily inferred by even the most basic of algorithms. Just by joining -- often under the illusion of privacy -- we reveal ourselves.

Users' Gift to Advertisers

But few stop there. We share some of the most intimate details of our lives -- romantic entanglements, snapshots of children, education, and work history. We even friend and "like" brands, post news of purchases in our Facebook News Feeds, and berate companies for bad customer service.

This pervasive conversation on our collective consumption habits turns what was once one-dimensional data into a more holistic and contextualized profile of specific consumer groups.

Online networks reflect offline connections. We live near, go to church with and spend time with friends like us. Yes, online networks infuse data streams with a level of granularity never before available, but the ability for brands to isolate a certain group of people isn't exactly new.

Ironically, it's the data required by government institutions that's made traditional consumer targeting possible -- from the Census Bureau and U.S. Postal Service to birth records, court records of marriages, and even traffic tickets -- all sources that arguably spawned the multi-billion dollar direct marketing business. This data isn't optional; participation in a civilized, market-society requires it. And all of it, to varying degrees, is publicly available for companies to access and interpret.

By contrast, many of today's online advertising applications operate in the zone of halfnimity -- a middle ground between full identity and online anonymity. Terms like "targeting" and "tracking" tend to conjure more troubling notions, something comparable to a credit report or medical record.

That's not to suggest that more insidious tracking and trafficking of such information doesn't occur. Private investigators, for example, can now acquire certain profile information, such as your Facebook username, from various paid databases, and that data may be linked to other identifiers, like your Social Security number, creating a permanent history. Unlike criminal, civil, credit and driving records, use of this kind of information in a pre-employment check or background investigation is not currently limited by federal law.

A Transparent and Uncertain Future

In 2011, online behavioral marketing will be coming out of the shadows and into the spotlight. Consumers need to understand the indirect benefits of online ads and the potential tradeoffs of opting out. Brands should be telling that story, too.

Because it's not just government intervention that could pull the plug on online ads. The free, open-source AdBlock Plus (yep, the name says it all) recently became the first browser-based add-on to be downloaded over 100 million times.

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As Facebook grows ever larger and more powerful, we're increasingly caught in a zero-sum game between participation and privacy. The emerging cultural norms of transparency, openness and connectedness involve some inherent sacrifices.

In massive numbers, we are opting-in and theoretically making ourselves vulnerable -- but vulnerable to what, really? RapLeaf and other companies that sell your personal data? The People's Republic of China? The threats remain largely abstract, opaque, and seemingly academic. Persuasion is the stock-and-trade of marketers and brands, not coercion. We are not required to reveal the intimate details of our lives. Instead, we are increasingly choosing to do so.

If we are hurtling toward an irreversible rewriting of the collective definition of privacy, isn't the author all of us? With every new status update, we may be entering a Faustian bargain, but we really can't see whose hand we're shaking.

Mya Frazier is director of trends and insights at Engauge, one of the nation's largest independent advertising agencies. This article is adapted from the Engauge 2011 Digital Outlook, a comprehensive report on the future of marketing in the digital era. A former business journalist, she has been a staff writer at Advertising Age and The Cleveland Plain Dealer. You can follow her on Twitter or read her blog on Forbes.com.

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