Will FCC Allow Competition to Google’s & Facebook’s Advertising Monopolies?

Why is the FCC protecting and facilitating online advertising monopolies?

How can the FCC square its “competition, competition, competition” PR mantra with its regulatory plans for applying new anticompetitive privacy rules only on ISPs and not the “edge” online advertising monopolies -- Google and Facebook?

Simply as it relates to online advertising, the FCC’s new proposed Title II privacy rules would require ISPs with existing advertising businesses, or those planning to enter, compete, and grow in the online advertising market, to be subject to a new and special, privacy opt-in, consumer-consent framework where they alone in the marketplace would have to secure users’ advanced permission to use a majority of their data for advertising purposes.  

That is the exact opposite privacy consent framework under which ISPs have operated for over a decade, and under which all non-ISP online advertisers, including Google and Facebook, have always operated since the Internet’s inception -- i.e. under the FTC’s economy-wide, consumer opt-out, privacy-framework that facilitates the standard online advertising model of sharing one’s data in return for free content and services.

And the FCC’s proposed broadband, opt-in privacy, consent-framework is also the exact opposite of the FCC’s current approach that doesn’t protect consumers’ video viewing privacy in the FCC’s AllVid Set-Top Box rulemaking.

Tellingly, in the FCC’s Google-driven AllVid rulemaking, the FCC is fighting hard to force consumers’ currently private, supposedly-FCC-protected, video viewing information, to be made publicly available to edge providers, like Google, Facebook and others, in the interests of more set-top box competition.

Rather than be consistent and insist that the edge OTT providers respect the FCC’s strict consumer video viewing privacy protections, the FCC ironically is signally that it is not that worried about consumers’ video viewing privacy being made available to Google and Facebook without users opt-in consent, because it believes that the FTC and State AGs can protect consumer video privacy if the FCC cannot on AllVid!

How can the FCC simultaneously claim it is important that the FCC, not the FTC, should protect consumers’ broadband private information, while also claiming it is not important for the FCC to protect consumers’ private video viewing information, because it can count on the FTC to do so?

The answer is that both opposing FCC privacy positions help protect the “edge,” Google, Facebook, et al, above all else, including above consumers’ interests. Thus in the broadband privacy rulemaking, the edge’s Google and Facebook advertising monopolies benefit from regulatory protection from new ISP online advertising competition, and in the AllVid set-top box rulemaking, they benefit from open access to the only trove of consumer private information that they currently can’t track.

The FCC further protected Google and Facebook’s online advertising monopolies against consumer choice when the FCC staff rejected, without any FCC vote, Consumer Watchdog’s petition to give users control over how their private network information is used -- via a “Do Not Track” list modeled after the wildly successful FTC “Do Not Call List.”       

To further understand the inherently anticompetitive effect of the FCC’s proposed asymmetric broadband policy rulemaking, consider how clear the Moody’s investor service was in its analysis: “We believe this proposal will have a negative impact on both fixed and mobile broadband providers. If approved, the ability to compete with digital advertisers such as Facebook and Google (Aa2 stable), who are able to collect the same type of data from consumers who access their websites and those of others, will be severely handicapped in the future as the old guard ecosystem evolves to become more competitive… Absent an alignment of rules between the FTC and FCC regarding these privacy laws, a distinct competitive advantage will be given to online digital advertisers…”

In short, the FCC is clearing stepping on the regulatory scales to protect and favor Google and Facebook’s online advertising monopolies over its most likely new insurgent online advertising competitors – ISPs.

That’s not the FCC’s touted competition, competition, competition.  


Scott Cleland served as Deputy U.S. Coordinator for International Communications & Information Policy in the George H. W. Bush Administration. He is President of Precursor LLC, an emergent enterprise risk consultancy for Fortune 500 companies, some of which are Google competitors, and Chairman of NetCompetition, a pro-competition e-forum supported by broadband interests. He is also author of “Search & Destroy: Why You Can’t Trust Google Inc.” Cleland has testified before both the Senate and House antitrust subcommittees on Google and also before the relevant House oversight subcommittee on Google’s privacy problems.