The Privacy Debate Beyond Google-DoubleClick
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With Google's (NASDAQ: GOOG) acquisition of DoubleClick having won the final regulatory approval it needed, the debate over consumer privacy and behavioral targeting in online advertising is far from over.
Despite the vigorous lobbying efforts by privacy watchdogs like the Electronic Privacy Information Center (EPIC) and the Center for Digital Democracy (CDD) to make consumer data protection a part of the merger review, both U.S. and European regulators determined that their investigation would only consider how the combination would likely affect competition.
Those groups may have failed to convince regulators to block or attach conditions to the merger, but their relentless and public opposition has succeeded in ensuring that data collection, privacy and behavioral targeting will remain a front-burner concern in any governmental consideration of the Internet economy.
The same day that the Federal Trade Commission signed off on the DoubleClick purchase, it issued a separate list of self-regulatory principles for online behavioral advertising, calling on companies to educate consumers about the data they are collecting and what they are using if for.
Late last month, the industry association representing online marketers issued its own set of privacy guidelines, offering companies considerably more latitude than the FTC's proposal. The FTC guidelines suggested that "companies should only collect sensitive data for behavioral advertising if they obtain affirmative express consent from the consumer."
The Interactive Advertising Bureau (IAB) countered with the more nebulous assertion that "businesses should be responsive and accountable to consumers," and offer consumers a "means to express concerns and complaints" about privacy.
The basic friction is the time-honored push and pull between government oversight and the unregulated free market. Privacy advocates claim that advertisers, left to their own devices, will not respect consumer privacy.
"If self-regulation protected privacy, we would support it. But it doesn't," EPIC Executive Director Marc Rotenberg told InternetNews.com. "Self-regulation has allowed the industry to do pretty much whatever it wishes with the personal data it collects. That's the problem."
Meantime, in championing self-regulation, Web marketers claim that it is in their own business interest not to violate consumer privacy.
"IAB members understand the relationship between consumers and companies is built on trust," IAB President and CEO Randall Rothenberg said in announcing the industry group's privacy guidelines.
"Based on the industry's experience, we believe the FTC is too rigid on matters of notice and choice," he said. "Our principles strike the appropriate balance between protecting consumers' security and allowing industry to provide the free services and content they desire."
The advertising payoff
It has become a truism of the Internet economy that advertising makes content free. Site owners can better afford to offer free news, videos and other content by placing targeted display advertisements on their site. That business line resulted in a $3.1 billion payday for DoubleClick's owners after Google decided to make the purchase, hoping to beef up the counterpart to its search advertising.
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