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Thursday, August 27, 2009

Online Advertising: Privacy Zealot-Elitists v. Real Consumer Advocates
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Mediapost has published an interview I gave to Omar Tawakol, founder of the BlueKai registry entitled "User Empowerment, Not Regulation, Is The Answer to Privacy Concerns About Targeted Ads" in which I summarize the arguments Adam Thierer and I have been making since our "Principles to Guide the Debate" piece last September.

We argue for user empowerment over restrictive defaults (like "opt-in") for data use and collection because, as the Supreme Court held in 2000: "Technology expands the capacity to choose; and it denies the potential of this revolution if we assume the Government is best positioned to make these choices for us."

We promote tools that let users make their own decisions about privacy, not only because those decisions are fundamentally subjective, but because regulatory mandates could stifle the development of online content and commerce.

I also note the parallels between speech controls and privacy regulation, and call for a consistent, principled approach to both:
Since 1997, the Supreme Court has struck down multiple legislative attempts to censor online and offline content [especially the CDA] because there were "less restrictive alternatives" that would not so heavily burden free speech rights. In a 2000 cable-related decision, the Court held that "targeted blocking [by users] is less restrictive than banning, and the Government cannot ban speech if targeted blocking is a feasible and effective means of furthering its compelling interests."

Courts have struck down other federal and state speech controls because parents had the tools to filter their kids' access to information online, in video games, etc., as described in my PFF colleague Adam Thierer's ongoing catalog of these tools...

Many who oppose industry self-regulation are not really "consumer advocates" because they don't recognize that consumers have many, competing values. Those regulatory advocates are more interested in their preferred one-size-fits-all mandates than in empowering users to determine their own privacy preferences.

Like advocates of censorship, privacy zealots assert great dangers to which citizens are supposedly oblivious but which urgently require government intervention-dismissing arguments to the contrary as either uninformed or irresponsible.

The comments on the interview are equally worth reading. Jeff Chester, who has made a career out of attacking advertising, quickly posted a comment dismissing, but ignoring, my arguments about consumer welfare as corporate propaganda--just as he did with his comment on the post Adam and I wrote in June about congressional hearings on the issue featuring Chester (and Scott Cleland, the right-wing "Bizarro Chester"). I've had it with Chester's ad hominem attacks on the motives of those who disagree with him, as I explained in my reply to Chester:

Despite our profound "Conflict of Visions," I must rush to Mr. Chester's defense to point out [contrary to the assertion of another commenter who criticized Chester's motives] that his salary has only reached "six figures" in one of the three years for which Chester's group, the Center for Digital Democracy, has filed their Form 990 returns with the IRS: $101,500 in 2005, but a mere $97,925 in 2006 and $96,750 in 2007 (including benefits). Given CDD's declining donations, Chester's salary has grown from 35% of CDD's income in 2005 ($288,807) to 56% ($172,852) in 2007. As a result of deficit-spending to maintain Chester's salary, CDD's 2007 assets were just half what they were in 2005 ($203,508 / $411,174). These returns are available on guidestar.org.

I might take the same approach Chester takes in attempting to dodge our arguments: question his motives and suggest that the hysteria level of his arguments has grown in close correlation with his increased need to boost CDD's donations, which have sagged even as his salary has remained constant. But unlike Chester and others who suffer from the "Vision of the Anointed," I am not in the business of--as Thomas Sowell put it--"disdainfully dismissing" arguments contrary to my own "as either uninformed, irresponsible, or motivated by unworthy purposes."

I truly take Chester at his word: I think he genuinely believes the fantastical claims he makes about the evils of "targeted" advertising and that advertising is manipulative, creating what Neo-Marxists would call "false consciousness" (making people think they want things they don't). I don't think he's merely trying to drum up donations (although that may be a happy coincidence of his Chicken-Little-ism).

I ask only that Chester grant us the same respect by recognizing that our arguments are deeply rooted in a principled belief that online advertising creates enormous value for consumers, and that better targeting should be celebrated as a way of sustaining media in the 21st century, not an evil conspiracy by a shadowy cabal of advertisers.

I take no pleasure in noting that Chester makes more money than I do (assuming his salary has not finally started to decline since 2007 along with the apparent downward trend in CDD's donations). Moreover, since my market value as a recently-practicing lawyer is probably considerably higher than this, I gave up quite a lot to fight the battle of ideas when I joined The Progress & Freedom Foundation last year. Chester may not agree with my arguments, but for him to dismiss me as a corporate whore is simply laughable. If I really wanted to sell out, I would go back to a law firm at an annual salary greater than the donations his Center for Digital Democracy received in 2007.

I would not have chosen a career as a consumer advocate at considerable personal cost if I were not utterly sincere in my convictions. So, please, Jeff, spare us all your sanctimony and engage our arguments on substance. Your dismissal of Omar Tawakol is also grossly unfair, since BlueKai has been an industry leader in empowering users with its consumer preference registry.

On substance, I find it equally amusing that Chester has embraced the rhetoric of "consumer empowerment" in support of an agenda that is about just the opposite: making choices for users. Our argument is that we should to do everything we can to empower users to make their own choices about privacy preferences through tools like the BlueKai Registry, Google's Ad Preference Manager and other more radical innovations. But Chester's argument is that government should mandate restrictive default settings (e.g., opt-in). This is not empowerment but arrogant presumption: Chester is an elitist not only because he presumes that consumers are as paranoid about "being tracked" as he is, but also because he would impose a default (no tracking) that would destroy the economic value created by targeted advertising. That default has enormous costs for users as an "Industrial Policy for the Internet," reducing revenues for publishers whose "free" content and services Chester takes for granted, but which benefit Internet users around the world.

Further discussion of this issue, including a very lame retort by Jeff Chester, can be found here.

posted by Berin Szoka @ 9:01 AM | Advertising & Marketing , Philosophy / Cyber-Libertarianism , Privacy

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