High Quality
Open the downloaded document, and select print from the file menu (PDF reader required).
1444 EYE STREET, NW
SUITE 500
WASHINGTON, D.C. 20005202-289-8928
mail@pff.org
www.pff.org
Privacy Trade-Offs: How Further RegulationCould Diminish Consumer Choice, Raise Prices,Quash Digital Innovation & Curtail Free Speech
Comments of Berin Szoka, Senior Fellow, The Progress & Freedom Foundation,
to the FTC Privacy Roundtables (Dec. 7, 2009), Comment, Project No. P095416
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 tocontrol information about themselves and when they exercise that power consistentwith their interests and values
.”
1
As such, privacy is not a monolith but varies from user to user, from application toapplication and situation to situation.
There is no free lunch
: We cannot escape the trade-off between locking downinformation and the many benefits for consumers of the free flow of information.In particular, tailored advertising offers significant benefits to users, includingpotentially enormous increases in funding for the publishers of ad-supported contentand services, improved information about products in general, and lower prices andincreased 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:1.
What exactly is the
“
harm
”
or market failure that requires government intervention?2.
Are there
“
less restrictive
”
alternatives to regulation?3.
Will regulation’s costs outweigh i
ts supposed benefits?4.
What is the appropriate legal standard for deciding whether further governmentintervention is required?We have addressed these questions in the PFF publications attached below, which I respectfully
submit for the Commission’s
consideration. This executive summary highlights their findings.
Berin Szoka is a Senior Fellow with PFF and the Director of PFF’s Center for Internet Freedom. The views
expressedhere are his own, and are not necessarily the views of the PFF board, other fellows or staff.1.
“Properly defined, privacy is the subjective condition people experience when they have power to controlinformation about themselves.” Jim Harper, C
ato Institute,
Understanding Privacy
–
and the Real Threats to It
, CatoInstitute Policy Analysis No. 520, Aug. 4, 2004, http://www.cato.org/pub_display.php?pub_id=1652.
Page 2 Szoka Comments on FTC Privacy Roundtable, Dec. 7, 2009
, Berin Szoka & AdamThierer, Progress Snapshot 4.19, Sept. 2008.
, Berin Szoka &Adam Thierer, Progress on Point 16.2, Apr. 2009.
, Berin Szoka, Progress Snapshot 5.10, Oct. 2009.
, Berin Szoka & MarkAdams, PFF Working Paper, Nov. 8, 2009.
2
Regulating Online Advertising: What Will it Mean for Consumers, Culture & Journalism?,Berin Szoka, Mark Adams, Howard Beales, Thomas Lenard, Jules Polonetsky, Progress onPoint 16.22, Oct. 2009.
I.
A Principled Pro-Consumer Alternative to Further Regulation
The “Privacy Wars” that have waged over how government should r
egulate online collection
and use of data might better be referred to as the “Privacy
Proxy
Wars” because the mostclearly demonstrated “harm” at issue seems to be from government itself, not the privatesector. The Fourth Amendment guarantees that “
The right of the people to be secure in theirpersons, houses, papers, and effects, against unreasonable searches and seizures, shall not beviolated
…” Americans have a legitimate expectation that this “security” extends to their digital“papers and effects,”
yet that expectation is not given effect by current restraints on
government
access to consumer data in American law. Thus, we have proposed the followinglayered approach to concerns about online privacy, focusing on restraining government accessto data, rather than crippling the private sector uses of data that directly benefit consumers:1.
Erect
a higher “Wall of Separation between Web and State” by increasing Americans’
protection from government access to their personal data
—
thus bringing the FourthAmendment into the Digital Age.2.
Educate
users about privacy risks and data management in general as well as specificpractices and policies for safer computing.3.
Empower
users to implement their privacy preferences in specific contexts as easily aspossible.4.
Enhance
self-regulation by industry sectors and companies to integrate with usereducation and empowerment.5.
Enforce
existing laws against unfair and deceptive trade practices as well as stateprivacy tort laws.
Such a layered approach would not only be a “less restrictive” alternative to increased
government regulation, but also potentially more effective in key respects than governmentdata use/collection mandates. In an ideal world, adults would be fully empowered to tailorprivacy decisions, like speech decisions, to their own values and preferences
(“householdstandards”).
Specifically, in an ideal world, adults (and parents) would have (1) the
information
necessary to make informed decisions and (2) the
tools and methods
necessary toact upon that information. Importantly, those tools and methods would give them the ability to
2. Currently in draft form, pending further research quantifying the benefits of personalized advertising.
Szoka Comments on FTC Privacy Roundtable, Dec. 7, 2009 Page 3
block the things they don’t like—
annoying ads or the collection of data about them, as well asobjectionable content.A wide variety of self-
help tools and “technologies of evasion” are readily available to all users
and can easily thwart traditional cookie-based tracking, as well as more sophisticated trackingtechnologies such as packet inspection. While cookie management tools that allow users todelete their cookies have been standard in browsers for some time, the latest generation of browsers incorporates far more advanced control over what kind of cookies browsers willaccept from websites in the first place. Furthermore, the extensible nature of modernbrowsers allows any freelance software developer who sees a way to improve a browser to doso by writing an add-
on that “plugs in” to the browser using standard programming interfaces
designed by each browser developer. Many such add-ons are wildly popular, but even thoseusers who never install a single one benefit from the acceleration of browser evolution madepossible by add-ons. We have documented examples of these tools in an ongoing series of blog
But a “layered approach” that relies on user empowerment and education need not be perfectto be “good enough,” because “privacy” is not an absolute good that trumps all other consumerinterests, nor can “community standards” accommodate a diverse citizenry. If we “ma
ke the
best the enemy of the good” by insisting on perfection, consumers will be made worse off.
Advertising is indispensable to the future of online media, but it is also currently inadequate to
sustain “Free” culture.
The advocates of regulation pay lip-service to the importance of
advertising in funding online content and services but don’t seem to understand that this
quid pro quo
is a fragile one: Tipping the balance, even slightly, could have major consequences forcontinued online creativity and innovation.
Something
must give because there is no freelunch
.
3
II.
Benefits to Users of Smarter Online Advertising
The attached working paper I co-authored with PFF Visiting Fellow Mark Adams identifies fivebroad categories of benefits to users from targeted advertising:1.
More relevant, and potentially less annoying/interruptive advertising for consumers;2.
Higher-quality content and services supported by advertising;3.
Better correlation between the production of content and services, and consumerpreferences;4.
A more vibrant media and improved political discourse and communities; and5.
Lower prices for consumers and greater innovation throughout the economy.
3. Berin Szoka & Adam Thierer, The Progress & Freedom Foundation,
Targeted Online Advertising: What’s
the Harm & Where Are We Heading?
, Berin Szoka & Adam Thierer, Progress on Point 16.2, April 2009,www.pff.org/issues-pubs/pops/2009/pop16.2targetonlinead.pdf .
Add a Comment