Protecting Consumer Privacy and the Upheaval of the Digital Economy

Great article in the NY Times today about an exceedingly thorny issue, that of consumer privacy and legislation that potentially prevents businesses from tracking consumer behavior and collecting and brokering consumer data. Even if the basics of the proposed regulations seem to lack bite, professionals in the digital and information industries are loth to cede any ground on what they believe to be an issue that will open the door to further limitations to how they do business. For them, the issue at stake is that they will lose access to the necessary data to run their businesses efficiently. Should that happen, the costs of advertising will rise and potentially become prohibitive, which could quite possibly have the effect of reducing overall marketing spend. In such an environment, it's easy to see how all companies with a digital component - from search engines, whose key differentiating factor is in identifying relevant results, to social networks, whose appeal rests in putting its users in contact with the people and items that are the biggest parts of their everyday lives, to even news outlets like the NY Times itself, which curates news for its users, and, more importantly, which as a free news site depends on advertiser revenues to keep its digital business afloat - could be made squeamish by what appears to be an encroachment of their essential business practices. 

Further, detractors of the FTC's recommendation might argue that individual consumers aren't taking into account that increased relevancy of advertisements, as well as content, ultimately make their interactions with the web more meaningful, and are, at least for the search engines, the only way to make sense of the glut of information that users can access. In the comments to the NY Times article, there appear to be several readers who find targeted advertising creepy and in many cases flat-out off-the-mark. Ironically for the second observation, online tracking stands only to help businesses to get smarter about what consumers and, more generally, internet users see. If there's a complaint to have, it's that some consumers stand to be left out of advertisements as they are deemed unlikely to be profitable customers of a given product. In this case, the issue would be less attention, not more.

Ultimately, I agree that it is imperative that consumers have confidence that 1) their privacy is respected, and 2) that they should have some degree of control over what they see. But, for every individual who blocks all tracking (which, incidentally, is easy enough to do with any number of browser tools and free, easily available products), there should be an understanding of exactly what is being given up. And, of course, what isn't being given up; after all, it isn't incredible to think that governments will continue to have access to everyone's data, 14th Amendment or no.