Wednesday, October 09, 2013

Is Privacy Dead ?


Introduction: The day's topic was a provocative question that, in turn, generated more, equally provocative questions: How much privacy? For whom? From whom? And, as host Gordon Platt of Gotham Media put it, in kicking off the September 26 event: Does it matter?

Gotham Logo 

Moderator Greg Boyd, partner at Frankfurt Kurnit Klein & Selz, introduced additional complications: the depth and breadth of the topic, exacerbated by rapid changes driven by societal values and technology and legal and regulatory differences in jurisdictions that have to work better and work better together.

Privacy (or lack thereof): Benefits vs. Costs

There was a divide among the panelists between (a) those businesses reliant on greater freedom of action who decried a lack of understanding by the public/government/media and (b) those more cautious about the shifting landscape - the media and operating companies.

Emily Steel, the U.S. media and marketing correspondent for the Financial Times, discussed her beat, which includes data and privacy, and served as the media representative, bearing the criticism of the marketers and defending the venerable fourth estate.

John Montgomery, the CEO of Group M Interaction, a media investment company, argued that consumers benefit by providing their information to advertisers and marketers.  He pointed out that the business is built on data and cited Internet guru Vint Cerf to the effect that there is no privacy.  Furthermore,  nothing on the Web goes away or is unnoticed.   He argued that his industry has done badly re: educating consumers and society.  A major theme is that regulation is not the answer, unless we want to shut the Internet down.

Similarly, Kevin Lee, the CEO of Didit, a search engine and digital marketing agency, made a distinction between privacy issues and anonymous tracking of online users, a distinction he felt was not understood by Washington and the news media.

Ellie Boragine, the advertising and commercial counsel at JetBlue Airways, represented a company inadvertently caught in the privacy wars.  As she put it, privacy issues had not previously been considered part of the airline business. Privacy had become a big issue lately as part of their marketing and PR efforts, especially as the interests of their passengers collided with those of national security - who is traveling where, when, and paying for it how?

Self-Regulation or Benign Regulation from Uncle Sam ?

Montgomery argued on behalf of marketers that privacy should be self-regulated, not regulated, in order to keep the benefits to consumers and advertisers.  After all, 99% of the web is free, supported by advertising, which in turn depends on information about consumers, supplied voluntarily or otherwise.  To provide an idea of the value at stake, he offered an MIT study - an opt-in campaign is 65% less effective, and if mandatory, would cost the ad/marketing industry $30 billion.  Contrasting regulation with the needs of marketers, he argued that things move slowly in Washington but quickly in this industry.  Making things even worse, he contended, regulators don't understand this space.

Steel pointed out that, understanding or not, regulators are moving ahead.  There are at least three Federal  investigations, led by the Federal Trade Commission, Senator Jay Rockefeller, and the Government Accounting Office.  As an example of how quickly the landscape changes, since Senator Rockefeller began his investigation in October 2012, mobile traffic has doubled.

A major issue discussed was that of profiling consumers, which could be discriminatory.  It was pointed out that Europe is more sensitive to privacy, partly due to historical abuses by governments, but concern certainly seems to be growing in the U.S.

Montgomery admitted that the NSA's PRISM program hasn't helped his cause as many issues relating to privacy are being tarred with the same government surveillance brush.  He of course viewed his activities as benign: he just puts a cookie on users' browsers to track them and serve them relevant ads.  He argued that a cookie does not constitute the dreaded Personally Identifiable Information, since that is not his business model.  Therefore, people are unjustly concerned more about possible negative ramifications of his information collection instead of appreciating the wonderful benefits of the online ad business.

He also argued that much of the concern was created by the news media, which likes a good fight. 
Because the news media is not covering the value side - a free ad-supported Internet - but only the bad side of privacy issues, it is creating a backlash among the public.

Kevin Lee agreed that the news media likes to cover a fight.  He also argued for a distinction between truly personal information vs. what consumers perceive as personal.  He did concede that not all proposed guidelines were unreasonable, perhaps such as ones that cover disclosure and consumer control of information.  Furthermore, he admitted that even members of the tech community can have difficulty comprehending nuances in the overlapping areas of technology, consumer preferences and government regulation in a constantly-changing environment.

As an example, Ellie Boragine listed how privacy concerns have created additional regulatory obligations for airlines such as JetBlue.  For example, national security requires the airlines to disclose passenger information.  At the same time, however, while that passenger information is valuable to advertisers, it has not been disclosed to potential advertising partners.  Of course, while the airline attempts to explain this distinction to its consumers, the audience may or may not understand such nuances.

It's All the Fault of the News Media:

Moderator Boyd returned to the issue of the press's role in covering these questions.

Steel argued that j
ournalists need to explore and explain.  As she put it, the online ad industry "operates in the shadows." Before the press took a closer look, nobody knew how much tracking was going on or how many companies were receiving the information.

Furthermore, someone needs to safeguard the industry's self-regulatory actions.  Acxiom, which is supposedly revealing what they know about consumers, actually failed to disclose lots of information, including the calculations and conclusions being made about people.  Also, Capital One uses data to present different offers to different classes of consumers.  When does making distinctions among consumers  become illegal discrimination?

Montgomery argued that today's issues are nothing new: marketers have always been profiling, but of course that they should be called out if they are discriminating.

Is It All the Responsibility of the Consumers ?

If people do understand the trade off between benefits and costs of online privacy, as Emily Steel argued, then, with sufficient transparency, consumers can make their own decisions. 

Montgomery questioned the concept of "harm," beyond one Senator's characterization of the invasion of online privacy as "creepy."  Since AdChoices provides consumer information in every behavioral ad, then have they provided the twin Holy Grails of transparency and choice?

As somewhat of a counter-point, Kevin Lee argued that people don't read privacy policies.  But does that mean that people don't care or that they should be protected from themselves?


As Boyd pointed out at the beginning of the session, the topic of online privacy is complicated, frustrating and wide-ranging.  The question - Is Privacy Dead? - was never really answered.  In such a brief session, it's unclear what is the definition of privacy itself!  Of course, that is not going to keep this topic from being a critical and loudly-argued one for quite a long time to come.