There is a movement afoot in Washington, D.C. that, left unchecked, could ruin the commercial Internet as we have come to know it. Although you’ll never watch a minute of TV coverage about it (unless you watch congressional hearings on CSPAN) and the only press it receives is buried at the bottom of A-15, the federal government is steadily moving to stop the collection of “data” about usage on the Internet.
Nobody wants their privacy invaded, so the arguments against data collection generally find a receptive audience. But the sweeping changes in the privacy law threaten to cripple some of the best features on the Internet and, by eliminating targeted advertising, remove the most important revenue stream driving innovation and services in the industry.
The issue is whether behavioral data – information about what we click and when and how often we click it – is information that we own, and therefore can stipulate that no one else may monitor or use it. According to Randall Rothenberg, President and CEO of the Internet Advertising Bureau (IAB), the sweeping changes under consideration would establish “a new property right, unique in U.S. law, that would provide consumers personal ownership of all information that derives from their activities, no matter how anonymous, non-identifying, aggregated, or otherwise impersonal it may be.”
Right now, the Federal Trade Commission (FTC) is proposing regulations to control “behavioral advertising” and Massachusetts Congressman Edward J. Markey said he will be introducing legislation that provides “legal guarantees” that consumers have with respect to information.
Either of these measures could cripple the way the Internet works.
Why, you ask? Because all Internet activity yields non-identifying behavioral data all the time! Every time you request a page of a server, and the server delivers that page, a data exchange occurs and is recorded. Service providers record that exchange for many reasons – to understand site usage, server load, etc. At its most innocent, aggregate level, this is surely not an invasion of privacy. But the proposed changes in U.S. law could let individuals say they will not allow the data to be recorded.
Such a law would require the removal of “cookies” from Web applications. Cookies are small data repositories stored on the user’s machine that help a Web site streamline the users Web experience. Without cookies, eCommerce sites can’t hold items in your shopping cart or remember your preferred mailing address or recommend popular products. Eliminating cookies would diminish the user experience on the Web. Social media sites, such as Facebook, would be nearly out of the question.
But the most threatening feature of this new regulation/legislation is the impact it would have on the Web’s important advertising revenue stream. If you can’t collect aggregate data about audiences and usage, advertisers simply will not spend money on the Web.
Google Ads is completely and totally dependent on data collection. And ad revenue has fueled the innovation machine that Google has become.
The danger here is that to protect the privacy of individuals, the FTC and Congress might go overboard and cripple not just the Internet, but other customer data-intensive conveniences, such as bar-code readers in supermarkets.
People who misuse personal, private information should be prosecuted. But the measures being considered by the FTC and Congress are so sweeping that they could ruin the Internet. Will our regulators and legislators proceed with caution? Only if they understand the impact of what they are doing.
