Jeff Chester is the executive director of the Center for Digital Democracy, a national, not-for-profit group based in Washington, D.C., whose aim is to promote an electronic media system that fosters democratic expression and human rights. He spoke to Adweek about a range of topics including the Obama administration, online security and privacy, Google in China and other online regulatory issues.
Adweek: How would you rate the current administration in Washington?
Jeff Chester: Barack Obama became our first president to win office by using a wide range of interactive online marketing techniques. They know this business from the inside. The administration is immersed in the worlds of digital advertising and social media. They have placed high-ranking officials in the White House who have roots to Silicon Valley giants. The Obama administration has made a very promising digital start in its first year. Perhaps most critically, they’re using social and other new media to make government more open and accessible to the public. A brief review of some of the administration’s online-related initiatives shows that they’re aware that online media requires various regulatory safeguards. For example: the [Food and Drug Administration’s] current review on the role digital advertising plays promoting pharmaceuticals and health issues; the [Federal Trade Commission’s] very focused examination on the impact of digital marketing on personal privacy; the support for a broadband “network neutrality” policy at the [Federal Communications Commission]; and the recent call by Secretary of State Clinton for global Internet freedom.
How would you rate the administration in terms of addressing cybertheft?
Given the state of the economy, especially the banking and personal finance sector, as well as the healthcare debate, it’s understandable that the administration has taken a little more time to address cyber crime and security in a comprehensive away. The Obama Justice Department, however, appears to be well-focused on the issue.
How would you rate it in terms of addressing online predators?
The Obama administration appears to be addressing concerns over online predation responsibly. They have key government agencies engaged in the issue. In the past, this issue has been treated rather sensationally. I think wiser heads are prevailing here.
And how would you rate it in terms of addressing privacy rights (or the lack thereof)?
Under President Obama, the FTC has finally awakened from its long deregulatory slumber. Industry self-regulation is now longer the digital dogma. Under [FTC] chairman Leibowitz, the commission is thoughtfully analyzing how digital marketing is contributing to the erosion of personal privacy. I believe that it’s possible that the FTC may contribute to one of Obama’s chief legacy’s — helping protect consumers in the online marketing era.
How would you rate the administration in terms of setting up smart regulation for the digital world?
Smart regulation for the commercial digital world is what the Obama administration needs to broker. There’s a balance to be made between promoting the utility, power, economic clout and contemporary relevance of say, a Facebook and a Google, and ensuring there’s also a competitive and consumer protection-focused online environment. It does remain to be seen whether the administration will have the insight and courage to rein in powerful companies and address digital business practices that raise serious consumer concerns.
What’s the most important issue you think needs to be tackled on a regulatory level? And is it being addressed adequately?
Protecting personal privacy and ensuring equitable access to inexpensive broadband are the two most critical regulatory issues. I believe the FTC is helping seriously advance the former issue, but the FCC’s reliance on market competition for broadband is unlikely to bring us closer to ensuring all Americans, regardless of income and geography, have quality high-speed online services.
What’s your reaction to Google pulling out of China after all it’s gone through trying to establish a beachhead there? Does it signal trouble for other digital companies trying to access China’s huge population?
Google, Microsoft , Yahoo and other online giants should have never agreed to the Chinese government’s censorious conditions in the first place. These deals cast a shadow on the reputation of the companies. The trade-off they made was based on wanting to cash in on what will be the largest market for online services; they also rationalized that by providing a more limited search service they would help eventually bring about greater democracy. They were naive at best — complicit at worst. The attack on Google (and other companies) was a human rights wake-up call for the company. It’s better they leave then agree to prop up a government that doesn’t support human rights. I hope the Obama administration will ask that other companies, including Microsoft and major advertising companies, consider withdrawing from the China market. They all should be held accountable to take a stand where democracy — not digital dollars — comes first.
How serious is the government about regulating online advertising and publishing?
I think the administration will work with Congress to see what can be done to help the news media make the transition to the new economic online realities. But I don’t expect a major initiative in this area for a while. I do expect that by the end of the summer we will see what the FTC and FDA has initially in mind in the best ways to address the privacy and consumer protection issues raised by online advertising.
What do you think of the Interactive Advertising Bureau’s efforts to get out in front of this?
The IAB at first said there really wasn’t an online behavioral-marketing related privacy problem. Once they understood that a head-in-the-digital-sand argument would no longer work, it developed several new self-regulatory initiatives, created a PAC, expanded [its] D.C. presence, etcetera. I think the IAB and its leadership could serve the industry and the public more effectively by admitting there are serious privacy concerns, and that a sensible public policy framework is needed. The IAB is viewed in D.C. as a lobbying organization — that brings it political baggage that will ultimately impact its interests.
What are the major issues at stake for consumers if the FTC doesn’t regulate the online ad business?
Mobile devices, social networks and online video, for example, play an increasingly important role in commerce. From credit cards and loans, to pitches about health, to the marketing of food and beverages linked to the childhood obesity epidemic, the Internet is becoming the medium of choice for how we conduct our lives. The FTC has to address online marketing’s excesses if we are to protect consumers and families when they’re online.
What do you think of the arguments that Web publishers make against regulation — that serious regulation will kill their businesses, or that consumers don’t really care, or that other sectors like direct mail and credit cards are under regulated?
As consumers learn more about how much of their data is collected and sold — including through online ad exchanges — and that offline and online information are merging, there will be growing support for policy safeguards. Protecting privacy will be good for the online economy. Publishers will actually thrive under such a regulatory regime. The Internet will not go “dark,” as some online ad lobbyists claim, if individual users (citizens) control their information and the federal government enacts some reasonable rules protecting privacy.