Microsoft's new Do Not Track default browser may win the company points with Washington, but it pissed off the online ad industry.
Buried in yesterday's release of Windows 8 was a revelation that took the industry by surprise: Microsoft included in Internet Explorer 10 a Do Not Track feature that defaults to "on," making consumers opt-in to targeted advertising. The bold move pre-empted an industry-wide solution under development by the Digital Advertising Alliance, of which Microsoft is a member.
For more than a year, the DAA has been working to refine a self-regulatory system to appease regulators and keep Congress from passing new privacy rules that could cut off a growing segment of digital advertising. By the end of the year, the DAA was on track to deliver an industry-wide opt-out solution, an effort praised  earlier this year with the release of final privacy reports from the Federal Trade Commission and the Department of Commerce.
Microsoft, however, seems to have taken matters into its own hands, potentially upending the DAA's work to self-regulate online behavioral advertising in order to win brownie points with federal regulators and privacy advocates.
"Our commitment we made to the White House, the FTC and the public was that we would adhere to a default opt-out standard and we're in the process of figuring out the details," said Stu Ingis, general counsel of the DAA and a partner at Venable. "Microsoft's move isn't reflecting consumer choice, it's one browser company making a unilateral decision that is not good for consumers."
Microsoft's Do Not Track feature doesn't block tracking on the Internet, but it sends a signal to websites that the consumer does not want to be tracked. The problem is that if consumers leave the feature on, they will not be targeted with interest-based advertising.
"A default 'Do Not Track' mechanism is bad for consumers and the Internet economy," said Linda Woolley, acting president and CEO of the Direct Marketing Association, a member of the DAA. "It deviates from widely-accepted responsible industry practices and undercuts consumer choice."
In the end, Microsoft's default browser may backfire. It's likely that DAA Web companies that have agreed to an opt-out solution won't honor the default signal integrated into Microsoft's browser. "In my view, most websites will ignore it. They aren't going to put themselves out of business," Ingis said. "We've had this policy debate 15 times and every time the debate happens, the default has been opt-out. Even 'Do Not Call' is an opt-out, so it's clear what national policy is."
In a blog post, Microsoft's chief privacy officer Brendon Lynch argued that he hoped consumers would see the value in targeted advertising and opt-in to be tracked.
"We hope that many consumers will see this value and make a conscious choice to share information in order to receive more personalized content," wrote Brendon Lynch, Microsoft's chief privacy officer, in a blog post  . "For us, that is the key distinction. Consumers should be empowered to make an informed choice and, for these reasons, we believe that for IE10 in Windows 8, a privacy-by-default state for online behavioral advertising is the right approach."
Privacy hawks in Congress jumped on the Microsoft announcement. "Microsoft is taking an important first step towards greater privacy protections for consumers by making ‘Do Not Track’ the default for its new browser. It is my hope that Microsoft and other companies will go further in the future, so that Do Not Track also means 'Do Not Collect,' giving consumers the ability to say no to both targeted advertising and collection of their personal data,” said Rep. Ed Markey (D-Mass.), co-chair of the bipartisan Congressional Privacy Caucus.
Microsoft's browser rival has also weighed in. Alex Fowler, who leads privacy and public policy for Mozilla, issued a blog post on Thursday that was generally pro do-not-drack. Yet Fowler took issue with the idea of DNT being a default browser setting rather than a user-initiated choice.
Microsoft’s decision “will make DNT more mainstream and bring more attention to the important issue of user control," Fowler wrote. But, "DNT allows for a conversation between the person sitting behind the keyboard and the site that they want to visit. If DNT is on by default, it’s not a conversation. For DNT to be effective, it must actually represent the user’s voice.”