What If "Do Not Track" Does Not Get Derailed?

There's been tough talk recently from the FTC, the Commerce Department and Congress on online privacy. After the jump, the privacy mess we're in and the consequences for social media if, somehow, tough regulation gets enacted.

Though talk from the FTC, the Commerce Department and Congress is that action needs to be taken to improve consumer online privacy, it seems unlikely any party will be taking strong action any time soon.

Adverting is culpable for much of the present privacy mess. How did that happen and what are the consequences for the web and social media if informed consumers were able to restrict access to their personal information?

Digital privacy today

Let’s start by assuming that the overwhelming majority of social media and web companies – including Facebook, Google, Microsoft, Apple, etc. – have no agenda for your personal data other than to monetize it by improved targeting of advertising. We should also assume they really don’t want any of your personal data to leak out – it’s too valuable to their business model and reputation to keep it secure. (As numerous privacy breaches in recent months indicate, however, there are no guarantees.)

The cost of an ad is based on how well you can be matched to the target prospects of advertisers and how many just like you can be served up an ad on a particular platform. For decades, mass media ads were sold on a shaky foundation of geographic-based demographic assumptions. For example, prices for ads on network TV shows were based on viewer approximations in various cities. Now, consumers give up additional bits about ourselves to everyone from store chains via loyalty cards to social networks with every profile field we complete. It’s part of the price we pay for a discount on milk and access to cousin Fred’s wedding pictures.

Personal information has always been horse-traded; many saw solicitations during the holiday season from charities which “rented” mailing lists from other charities. The amount of data that is now collected is staggering because we are so willing to divulge. Just a few years ago, this discussion might have focused on our browsing history, surreptitiously recorded by our clicks. Compare that to the granular information Facebook collects when we happily complete our profile.

I sense that consumers are getting more careless, rather than more careful, about divulging their personal information. Using Facebook Connect or another of the social sign-on options links our browsing history to our social graph and profile in ways that can’t be erased by deleting browser cookies. Consumers are ill-informed about how to inoculate ourselves from the ever increasing ways brands are asking for – and getting – our personal data.

What probably won’t happen

There’s been much coverage on the recent discussions and proposals. Social Times reported on the FTC’s endorsement of a “Do Not Track” web tool (along with key reasons it might flop) and the Commerce Department’s call for a “Privacy Bill of Rights.” The Wall Street Journal, whose ongoing “What They Know” series on digital privacy is a must-read on this topic, cites members of Congress claiming their turf.

While the platforms know that whatever regulations are enacted will likely be quite mild, they will do everything they can to push back on any proposed restrictions to their business models. But, what if the most unlikely even occurred – the strictest possible regulations are imposed to require digital media to reveal how collected personal data will be used and to inform consumers of every instance in which that data is being used?

Welcome to your new Facebook experience. Right next to each field as you enter your profile is a way to control who accesses that bit of data. No more needing to drill down on a separate privacy page to find those control choices. And, there are several new privacy options, including denying Facebook the right to disclose your anonymous data to advertisers. What percentage of advertising opt-outs would it take to clip a zero off the end of Facebook’s valuation?

“Do Not Track” could make your browsing history and search terms unavailable to Google’s advertising platforms. As an undifferentiated surfer, ads on your search page will be sold at bargain prices – if they could be sold at all.

In this never-to-happen scenario with dramatically reduced advertising across all platforms, consumers will need to pay the real costs of digital and social media via subscription. I don’t think we are, at present, willing to pay because we have not yet seen any true harm from our disclosures. To the contrary, most of us see providing our date of birth, favorite bands and data on recent purchases as acceptable “subscription” fees. Our culture has created greater acceptance of revealing what was formerly private information and, even with the most stringent controls, we’ll opt in.