Q&A: Chester Writes the Book on Privacy

WASHINGTON As advertisers unleash powerful new tools that allow them to target ads based on age, gender, political views or taste in movies, complaints about privacy increase.

In his new book, Digital Destiny: New Media and the Future of Democracy, consumer advocate Jeff Chester takes on marketers who disregard privacy concerns, and the federal regulators who allow them to do so. As executive director of the Center for Digital Democracy, Chester helped lead the battle to pass the Children’s Online Privacy Protection Act in 1998.

Chester argues that the Internet and our democratic media system should do more than just sell things to consumers. Instead, they should create generations of active and informed citizens to help solve society’s deepest problems, from poverty to AIDS.

Q: In November 2006, your group and others filed a complaint with the Federal Trade Commission charging that new technology, which tracks Internet users and creates data profiles, was deceptive. You filed this year to include behavioral targeting of children. What is at stake for consumers in the new digital environment?

A: The Federal Communications Commission and the Federal Trade Commission have a “don’t ask, don’t tell” policy when it comes to the industries they are suppose to regulate. What we want to do is make people aware of the emergence of interactive advertising and the data collection apparatus that is now at the core of digital media. On Nov. 12, we sent a letter to the FTC asking it to investigate the newly expanded interactive marketing on Facebook and MySpace. Privacy is at the core of many of the concerns. But it is also a question of the nature of advertising and marketing in this era and what is deceptive, unfair and inappropriate. Unbeknown to most consumers and without the consent of consumers, a system has been developed to track each and every one of us and our behavior for one-on-one marketing efforts. A commercial-driven system of surveillance has been put into place. …Without conscious awareness and without the consent of the consumer, a system has emerged designed to get individuals to buy products and to have positive feelings about a brand. Soon, this system will be used to promote a political candidate or a cultural value. I am concerned about an unconscious system promoting changes in our behavior that has no checks or balances or safeguards to protect consumers and citizens. When you talk about it being deployed for pharmaceuticals and junk food, what does it take for the industry to recognize that there are real concerns here? I think this system is manipulative, intrusive and un-democratic.

After facing a consumer backlash, Facebook said it would allow users to opt out of its controversial advertising product called Beacon. That technology turns over their transactions to marketers. In return, advertisers can target paid ads based on age, gender, political views or taste in movies. Beacon also tracks Facebook members’ activity on some third-party sites. Why do you consider these advertising practices dangerous?

Facebook and MySpace say they are just targeting the profile data that consumers put in willingly. But consumers don’t know that when they sign up for services to aid them in their lives that their information will be sold to the highest bidders. Both Facebook and MySpace are targeting consumers by profiling. You are combining the behavioral targeting stuff with the personal information consumers put in their profile in a context to promote viral marketing. There is something unique now going on and this is what makes the issue of greater concern. Young people have seamlessly integrated their online and offline lives and they are encouraged by Facebook and MySpace to put up all their information. It has become part of their identity formation. The Europeans talk about social networking sites as an all-embracing identity tool. What is missing here is the intellectual debate. We are now talking about the need to regulate privacy in a way that takes into account that people who use social networking sites come to it with a very different intention in mind. They are on social networking platforms to live out their political and social lives—and consequently, it can’t be business as usual. Anyone who wants to find your kids’ real-life social network: it is all there. It is not about diminishing the ability of online commerce to grow. It is about establishing best practices and rules that protect privacy but allow commerce to prosper.

How does media consolidation advance the interests of marketers? And why should this be of concern to the public?

There are pros and cons here for advertisers. Media consolidates audiences for one-stop ad shopping. That’s something many marketers like. We are concerned about a new iteration of media consolidation. One reason our group opposes the merger of Google and DoubleClick is, we see this as one of the leading deals of a new wave of digital media consolidation. In 2007, there have been at least $30 billion in mergers and acquisitions in the digital media marketing sector where medium size companies have been swallowed up by giants. This new wave of consolidation in digital media is creating a handful of private ministries of information. These are companies that can collect massive amounts of data on all of us to pursue their business goals. We felt consolidation had a negative impact on journalism and public-service broadcasting and newspapers, but now it is important to look at the new system that has emerged. What is happening is, a handful of Internet companies are in control of most of the online publishing dollars. And it is time to sound the alarm about the new digital media monopoly.

In your book you write, “Our electronic media serve as a brilliant mirror that, at best, provides us with critical sources of information, insight, inspiration, creative expression, and commerce. But by its own design as well as through the media industry’s collective economic and political power, it’s largely become a fun-house mirror that distorts what we see, imagine, know, and understand.” What do you mean by that?

I wrote the book with a particular focus on television and the mainstream media system during this critical period of transition. The electronic media, so far, has largely failed in their role to serve us as citizens. From entertainment programming, to tabloids and reality shows, to the crisis in newspapers and news divisions. The New York Times and The Washington Post failed to investigate and report on the false assumptions that led us to war in Iraq. They have largely forgotten or ignored the poor people of the Gulf Coast whose lives have been devastated by Hurricane Katrina. There is no diverse ownership. Investigative journalism is an endangered species. The system is designed to serve advertisers, and it has been that way since the 1930s. This same system is now at play with new media. It is not surprising that they are now selling online time through a digital upfront and via day-parting. The real danger is that the digital media will primarily serve the interests of marketers. This is going to promote a much more powerful interactive entertainment system, where the applications to promote democracy are given short shrift. We have not gotten the media system that the country deserves, due to the failures of the news media to produce diverse and reflective forums for news. The stakes are high for the planet with war and global warming. The emergence of the new digital media provides us with a once-in-a-media lifetime opportunity to create a system that supports economic growth, but nurtures our democratic souls as well.

You say that media conglomerates are engaged in the practice of “brand-washing.” Can you define this term and elaborate on what it means for the average citizen?

Most of the online marketing and the interactive experience are being harnessed to serve the interests of the most powerful brands. Google is buying DoubleClick to secure the ad budgets from the top brands. You are talking about marketers using interactive communications to advance brands in totally new ways. We have gone beyond product or plot placement to the notion of promoting the interest of brands to create the long-term relationships that will help the brands achieve their marketing goals. We have to be worried about an interactive media culture whose primary fealty is to support the interests of brand marketers.

Do you think marketers are helping us “amuse ourselves to death” as you put it in your book? And if so, do you think advertising is bad for democracy?

A great many advertisers call it information and they claim it is the monetization model for the news, but they have not done a very good job with that. How marketers use the digital tools is important. I think our food ad report which shows what McDonald’s and Coca-Cola are doing to encourage unhealthy behaviors among youth is a good example of this.

You say that over the next several years, the FCC will help determine how the Internet and other digital media can better serve our democracy. Why do you think it’s likely that the FCC “will permit a few privileged corporations to benefit from a resource that belongs to all of us,” as you say in your book?

I think the FCC has a role ensuring network neutrality but it is the content services that are being developed and who controls them that will determine the future of interactive media. I think the FCC is, sadly, 10 years behind the time and by the time they understand it, the framework will be set. Much is also true for the FTC.

In a world of fragmented media, limited attention spans and TiVo-like technology, the advertising industry argues it is at a disadvantage. Yet you believe it is more powerful, not less. Why?

Advertisers and marketers are doing everything possible to remain in control of the digital environment, and they are involved in how this system shapes and affects everyone. Marketers are making sure their message is there on cell phones, in instant messaging and on videos. Marketers are actively seizing these new tools. On the one hand, they are publicly crying about their loss of clout over consumers and bemoaning their loss of influence over consumers. But on the other hand, they are all engaged in shaping and benefiting from this new generation of digital technologies.