Behavioral Advertising's New Swiss Cheese Privacy Proposal

The new industry-proposed "Self-Regulatory Principles for Behavioral Advertising" which Google publicly patted themselves on the back for today, conveniently do not apply to most all of Google's current advertising business. 

  • When one examines the fine print of the detailed document, it becomes clear that the new proposed self-regulatory privacy guidelines (which in fact are a significant improvement over the status quo) conveniently do not apply to contextual search advertising, the leading form of Internet advertising that Google dominates (per the DOJ), nor to contextual display advertising, the second-leading form of Internet advertising which Yahoo leads.  

As a big proponent of responsible self-regulation, I am disappointed when self-regulation is given a bad name when industry leaders badly game the system by conveniently self-defining themselves, for the most part, from being subject to much of the new self-regulatory guidelines.  

Why am I pointing out this arbitrage of privacy laws?

This is an obvious real-world example and proof-point of the central thesis of my privacy testimony before the House Energy & Commerce Subcommittees last month.

  • My central thesis was that America's "current technology-driven, "Swiss Cheese" privacy framework may be the worst of all possible worlds. In the absence of a consumer-driven, technology/competition-neutral privacy framework, consumers have neither a meaningful role in protecting their privacy nor the freedom to exploit some of the value of their private information -- if that is their choice." 

It is supremely ironic that the most powerful ~40% of the overall online advertising industry self-elected to effectively "opt-out" of industry efforts to establish a stronger national privacy framework.

  • Implicit in Google and Yahoo's position is that there are no privacy concerns involving contextual advertising requiring self-regulation, a self-serving position few outside the industry would agree with.

In the conclusion of my privacy testimony I said:

If Congress decides to legislate on Internet privacy, a consumer-driven, competition/technology neutral privacy framework would be superior to a technology driven privacy framework because it would:

  • Emphasize protecting people not technologies;
  • Empower consumers with the control/freedom to choose to either protect or exploit their own privacy; 
  • Prevent competitive arbitrage of asymmetric technology-driven privacy policies with a level playing field;
  • Stay current with ever-evolving technological innovation; and
  • Accommodate both privacy and publicacy interests by empowering real privacy choice.

In closing, I applaud the industry for making a significant improvement in self regulatory principles for the behavioral advertising segment of the overall Internet privacy ecosystem.

  • However, I am disappointed that the online advertising market leaders, Google and Yahoo, have chosen not to lead by example, and apparently have largely self-exempted themselves from better ensuring the privacy of American consumers.