RealTime IT News

No Easy Answers For Data Privacy

Annenberg Washington Series

WASHINGTON -- In the great Internet privacy wars, where so much of the debate takes place through prepared statements, official filings and carefully scripted comments, it's a rare moment when concerned parties from each side of the aisle sit down to engage in a public discussion.

At a National Press Club gathering here, representatives from consumer advocacy groups, Google, AOL and several universities cracked open the kernel of the debate: whether consumer education is an effective and viable solution to ensure that consumer privacy is not trampled upon.

More questions were asked than answered at this panel, hosted by the Annenberg Schools for Communication.

In the debate, the battle lines haven been broadly drawn between those who insist on government intervention to protect consumer privacy in the face of massive data collection, and companies and trade groups representing the industry, which typically argue that business models and supporting technologies are evolving at such a rapid rate that any laws enacted would inevitably stifle innovation.

The discussion comes as government authorities, foreign and domestic, are becoming increasingly interested in the issue. Last Friday, the U.S. Federal Trade Commission collected its final comments from concerned parties about its proposed self-regulatory principles for behaviorally targeted ads.

Commissioner Pamela Jones Harbour, one of the regulators who has been reviewing those comments, was on hand to offer a preamble to the discussion.

"Those providing comments reminded us about the free content and services consumers enjoy as a result of online advertising, adding that undue regulation would hurt marketers and would hamper publishers' ability to offer free content," she said. "So we must approach this issue with a careful balancing, acknowledging the realities of the changing business model, but demanding that the model respect the needs of consumers."

Harbour cast the lone dissenting vote in the five-person Commission's decision to bless Google's acquisition of DoubleClick with unconditional approval. Privacy advocates had lobbied ardently against the merger, and blasted the approval for failing to impose restrictions on the pooling of the two companies' data sets.

The two industry representatives, Jane Horvath, Google's senior privacy counsel, and Jules Polonetsky, AOL's chief privacy officer, seized the opportunity to showcase the privacy education initiatives their respective companies have undertaken.

Horvath gave nearly all her time allotted for prepared remarks to playing a video from Google's privacy channel on YouTube. In the clip, a Google engineer described in very simple language how search queries are routed across the Internet, and what data that process delivers to Google. [cob:Special_Report]

Polonetsky showed slides from AOL's latest educational campaign, where banner ads offer an explanation of how cookies work while describing a penguin's humorous travels across the Internet (the penguin visits AnchovieGourmet.com, and, miraculously, an ad for anchovies later appears when visiting the Penguin Times news site!).

They admitted that initiatives such as these are only a start, but they said that they signal an important step toward the evolution of the privacy policy as an educational tool. They are also meant to reinforce the linchpin of the argument for self-regulation: Alienating customers with deceptive practices is bad for business.

"Privacy protection is of course fundamental to consumer trust," Horvath said. "We believe that if we lose consumer trust people are one click away from leaving our service."

To the more severe critics, Web companies' educational efforts look more like a cynical ploy to stave off any regulatory affront to an extremely lucrative business model.

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