It should bring more attention to the marketing of personal data by ISPs
On Tuesday, Congress voted to repeal privacy regulations that would have required internet service providers to obtain consent before sharing the personal data of customers. As soon as president Donald Trump signs off, broadband providers like Comcast, Charter Communications and Verizon Communications Inc. will be free to intercept, track and sell the contents of everything we do on the internet. Cool, I look forward to purchasing the browser histories of the congressmen who voted in favour of repeal.
Broadband providers argue that if companies like Google and Facebook can profit off the collection of consumer data, they should be allowed to do so as well. In the interest of fairness, anyone should be free to monetise the personal information of anyone else! Here’s a celebratory statement from the Data & Marketing Association:
This is an important victory for all who benefit from the data-driven marketing economy, including tens of thousands of businesses and non-profit organisations and hundreds of millions of consumers. Consumers understand the value that relevant ads provide, and put the value of the services they get for free on the Internet at $1,200 per year.
That estimate seems a bit presumptuous. Can we similarly assume that marketers put the value of the data they collect from each consumer at $1,200 per year? What if I demand more value for my data? Regardless of price, there is little opportunity to abstain from this transaction: 51% of US households have access to only one high-speed broadband provider.
Consumer-privacy advocates are right to be outraged. Unfortunately, the horse left the barn a long time ago. Internet service providers have been tracking and selling customer activity since the early days of dial-up. Companies like Charter and AT&T Inc previously inspected their users’ web traffic and inserted ads where they saw fit. Other service providers hijacked search-engine queries and redirected browsers to their own paid partners. It’s unclear how much of this is still going on. The Federal Communications Commission privacy rules that Congress repealed this week were only proposed last October, and would not have taken effect until December.
A common defense to data-privacy concerns is that if you have nothing to hide, you have nothing to worry about. But the argument extends to both sides: If internet service providers had nothing to hide, they wouldn’t be using undetectable tracking cookies to collect users’ browsing data. What’s more, a company that has nothing to hide should have no problem with a rule that requires permission before selling personal information.
For the most part, data-driven marketing relies on the fact that people don’t know they’re being tracked. In one survey, 66% of respondents said that they did not want ads to be tailored to their interests. When the researchers explained how ad targeting actually works, that percentage went up to 84%. Last year, the Interactive Advertising Bureau found that 26% of desktop browsers use ad blockers, an increase of 34% over the prior year. Ad-blocker usage is expected to increase to a third of desktops this year. It turns out that most don’t want to be judged and labeled without consent.
If the only thing previously stopping ISPs from selling user data was a proposed FCC rule, then the control we have over our information usage is tenuous at best. Consumers cannot remove personal data from the hands of internet service providers, but they can make it harder to collect. Websites that use addresses beginning with HTTPS provide encrypted communications to protect the transferred content. Virtual Private Networks route traffic through private servers, and away from the eyes of service providers. A more drastic measure would be to use Tor browser, which anonymises web traffic by sending it through distributed servers all around the world. Users can also reduce their overall marketability by running ad blockers.
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The good news is that Tuesday’s repeal should bring more attention to the marketing of personal data by internet service providers. The first step toward mitigating the effects of information asymmetry in any market is to raise awareness of the fact that such asymmetry exists. In past cases, broadband providers voluntarily stopped their most blatant tracking and interception activity after loud public complaints. Even the greatest advertisements are useless if consumers don’t trust the messenger.
Elaine Ou, Bloomberg