The Interactive Advertising Bureau is urging the Federal Communications Commission to refrain from regulating Web privacy when it reveals its national broadband plan, due in mid-March. Such regulation, says the IAB, could harm innovation on the Internet.
“IAB believes that regulation by the commission, or potentially conflicting regulations from multiple government agencies, could stifle the Internet,” the trade group said in a February letter to the FCC.
“Existing robust self-regulatory principles provide consumers with strong protections in a manner that has allowed the Internet to thrive, thereby benefiting the U.S. economy,” the letter continued.
The group’s filing came in response to a request for comments about privacy issues raised by the Washington, DC-based Center for Democracy & Technology (CDT), a self-described public interest group. Earlier in the same month the CDT asked the FCC to solicit input on how to meet consumers’ expectations of privacy online and build privacy protections into new technology.
Market Choices Preferred
John Dozier, president and founder of the Richmond, Virginia-based Dozier Internet Law firm, said, “the private marketplace can most effectively define the proper relationship between people and privacy.” In short, he says, consumers have the power to protect their own privacy.
“People give up privacy if they get something of value in return,” Dozier said. “That’s the proper, free-market approach. If government does it, you run into the problem of inadvertent and unintended consequences.
“You are taking away the power of the owners to monetize their assets—in this case, their privacy,” he said. “Government intervention would inhibit the evolution of the data marketplace. Only if there is widespread abuse in the marketplace does regulation become essential.”
Overregulation Dangers Cited
Once the government starts adding new rules and restrictions, there tends to be overregulation of an industry, Dozier said. There are already some self-regulation policies in place within the Internet industry, he notes.
Dozier pointed to the credit card industry’s PCI Data Security Standard, which requires those who accept most major payment cards to secure their networks, protect cardholder data, and regularly test their servers for security breaches.
In addition to the PCI standards, Dozier said, online firms are also looking at how long they retain customer data, Dozier said.
“One of Microsoft search engine Bing’s major draws is that it holds onto customer data for less time than competitor Google,” Dozier said, adding Google is considering reducing the time it retains customer information due to pressure from Bing and consumer groups.
“The only valid reason for government intervention is a lack of self-policing,” Dozier said. “We’re not at that point yet.”
Private Privacy Incentives
Mason Wiley, senior vice president of marketing for Hydra of Beverly Hills, California, an online advertising company, says people outside the online ad business—including government regulators—are unduly worried about privacy violations.
“The major problem is that people outside the online advertising industry get scared once they learn that their data is getting captured,” Wiley said. “But the information you share online isn’t personally identifiable.
“We don’t know where you are or where you live,” he added. “The only way you could be identified would be if the [national security-level] information was captured. And that only happens if you are under a court-ordered subpoena, which only happens if you are wanted by the FBI.”
The “cookie” information that online advertisers capture, Wiley says, makes it easier for a consumer to visit Web sites without reentering personal information on every visit. This is not a problem, he said, because “all browsers offer the option of allowing you to turn off cookies, so that you can surf in private.”
Wiley notes the IAB is working with Congress and consumer groups to keep the public informed of privacy and other best practices for online activity, which he says makes government intervention unnecessary.
“If we have draconian regulation from legislators, it would cripple online business and would hamper the online experience for consumers,” Wiley said. “It would be very counterproductive.”