Category: health privacy

A Venture Funder Calls for Opposition to Privacy Rules Online–Cites the Need to Collect Financial, Pharma, and Youth Data


“Lightspeed Venture Partners is a leading global venture capital firm that manages over $2 billion of capital commitments.” Jeremey Liew is a managing director of the fund, with “a particular interest in social media, commerce, gaming and methods for increasing monetization.” Lightspeed is a backer of many high tech concerns, including online ad and data collection/targeting companies.   Writing in the company’s blog, Mr. Liew cites the recent call for online privacy safeguards.  He then writes [our emphasis]:

 

 “While it is always hard to argue against privacy, the impact of this level of restriction would be enormous for companies relying on online advertising. Financial services and pharma/health are two of the leading categories for online advertising; the youth demographic is highly attractive to many advertisers, and limiting behavioral targeting to one day without an opt in severely restricts the usefulness of the data.

 

I’ve spoken to a number of people at venture backed ad networks, and it is clear to me that more needs to be done to organize feedback to the FTC and congress about the proposed rule changes and legislation.”

 

I think Mr. Liew has helped underscore our concern.  Sensitive data involving a person’s finances, health, and their children, require serious consumer safeguards.

 

Our new Journal of Adolescent Health article on the Youth Obesity Epidemic and Digital Marketing

Prof. Kathryn Montgomery and I just published an article in the Journal of Adolescent Health [JAH] on the the role interactive marketing plays in the current youth obesity epidemic.  It is part of a special JAH issue focused on the obesity issue.  It’s a very good introduction to the current digital marketing landscape, and is one of a series of reports we have done on the issue.

Database Games AOL May Play: “Database Matching” Subscribers Behavior Online and Off

We think it’s ironic that the same week AOL joins with several other leading digital marketers to kill-off a new online privacy law in Maine designed to protect adolescents, an article in Advertising Age reveals how much it covets–and hopes to financially harvest–data from its 5.8 million customers.  Here’s an excerpt on so-called database matching–in essence, a digital spy watching what you do offline and on AOL:

Valuable eyeballs
While many major ad-supported internet properties would kill to have as many paying users as AOL, it’s the users’ behavior that puts them in the company’s sweet spot. Subscribers are AOL’s uber-users — more valuable than average because they use more AOL properties and products than typical web visitors and, as a whole, are a large part of the traffic that sees ads and then converts, either by clicking through or making a purchase.

The company also sees subscribers as a valuable source of research and insights — a sort of panel it can use to understand online behavior and ad receptivity.

“There are other ways they can bring value, ways we can use the data and understand how they interact with content,” Mr. Levick said [AOL’s president for global advertising and strategy]. “If we can look at them in the aggregate and see how they interact with certain advertising, it could bring us closer to the last mile of online research.”

How it would do that isn’t exactly clear, but like other web properties, AOL has databases of users who have registered for services and can work with marketers to “database match.”

“[Database matching] is interesting in terms of connecting online exposure to offline sales,” said Carrie Frolich, managing director-digital at Mediaedge:cia. “If I have a client that directly sells their product, be it a pizza-delivery or phone company, they know names and addresses, and AOL knows that. With the assistance of a third party, they can match up our database and their database and come up with a matched set that you can load into ad server and measure exposures and measure the lift.”

source:  Why once-dispensable access biz is central to AOL’s strategy.  Abbey Klaassen.  Ad Age.  August 24, 2009

Billy Tauzin, Wheeler dealer for PhRMA lobby and the Two-House MegaDeal Even Hollywood Wouldn’t Make

If you followed the career of Billy Tauzin while he was a power on the House Energy and Commerce Committee, you know that he supported further media & telecommunications deregulation, more media consolidation, and led an effort that would have undermined Internet network neutrality.  Tauzin, now head of the drug industry’s lobbying group PhRMA, recently brokered a sweet deal with the Obama White House on health care reform.  In order to secure support for a national heath care plan from a major industry lobbying group,  the Obama Administration agreed to a plan where drug manufactuers would provide some $80 billion in discounts and subsidies over the next ten years.  But the agreement, in my opinion, leaves the drug industry off the hook.

But here’s the Hollywood connection and why Tauzin’s wheeler-dealer skills have ended up working on behalf of PhRMA.  As Tauzin prepared to retire from Congress,  he sought much greener ($$$$) pastures, including taking over Jack Valenti’s role as head of the Motion Picture Association of America, MPAA.  According to Variety [Jan. 23, 2004], “negotiations between the MPAA and Tauzin had broken down because Tauzin wanted too much compensation. Valenti is one of the highest-paid lobbyists in Washington, pulling in more than $1 million a year, but Tauzin asked for hundreds of thousands of dollars more as well as a residence in both L.A. and New York.  “He was just over-reaching,” one source said.  Tauzin accepted “a more generous offer to become the pharmaceutical industry trade association’s top lobbyist…The offer from the Pharmaceutical Research and Manufacturers of America is said to be unprecedented for a Washington trade association. Tauzin currently chairs the House Energy and Commerce Committee, which oversees legislation affecting the telecom and media industries, as well as the pharmaceutical industry.”

In negotiating the deal with the Obama White House to protect the pharmaceutical industry from having to make meaningful contributions to national health care, Tauzin has clearly earned PhARMA’s “more generous offer” that trumped the MPAA.

Technology Policy Institute Spins the Privacy Debate in D.C.–Group funded by Some of the Biggest Data Collection Companies

Today, the Technology Policy Institute (TPI) is holding a Hill forum on privacy and the Internet.  The group’s announcement for the event states that “More privacy, however, would mean less information, less valuable advertising, and thus fewer resources available for producing new low-priced services.  It is this tradeoff that Congress needs to take into account as it considers new privacy legislation.”

What an absurd, reductionistic, and intellectually-dishonest claim.  First, this group is funded by some of the largest companies engaged in behavioral data collection and also fighting meaningful privacy policies.   That includes Google and Time Warner.  TPI’s other funders involved in some form of data collection and targeted interactive marketing include AT&T, Cisco, the National Cable and Telecommunications Association and Verizon.  Rep. Cliff Stearns, the ranking member of the House Subcommittee on the Communications, Technology, and the Internet is speaking at the event: that committee is currently drafting privacy legislation to protect consumers.  Panel speakers include TPI supporters Google and Comcast.  The lone privacy group on the panel, CDT, is funded by Google and others.  One academic on the panel also works for a high-tech consulting company.  The other panel academic has done fine work on social networks and privacy.

What makes TPI’s posturing absurd, beyond its funding conflicts, is the current economic crisis.  Consumer privacy laws are required to ensure that our financial, health and other personal transactions online are conducted in a responsible manner.  Anyone–or group–who believes that we can’t have both privacy and a robust online marketplace is out of touch.

IAB Works to Undermine Obama Consumer Protection Plan [On its Exec. Board includes Google, Time Warner, Disney, NYT, CBS, WPP]

The Interactive Advertising Bureau (IAB) signed a July 20, 2009 letter sent to Rep. Barney Frank of the House Committee on Financial Services raising questions–and really attempting to undermine–the Obama Administration’s proposed Consumer Financial Protection Agency.  Others signing the letter included the Business Roundtable, Consumers Bankers Association, Consumer Data Industry Association, Financial Services Roundtable, the Real Estate Roundtable and the U.S. Chamber of Commerce.  The IAB wasn’t the only ad lobby group signing the letter; so did the 4A’s and the DMA.  My colleagues in the consumer community view the letter as an attempt to derail the bill [the letter, which asks for a delay on the bill, says that “there will be significant dangerous, unintended consequences if the legislation is enacted in its current form.”]

Why would the IAB be concerned about the creation of a new powerful consumer financial watchdog?  It’s because their members work with companies engaged in digitally-related financial products–including mortgages, loans, credit cards, and so-called lead generation services.  The IAB benefits from the hundreds of millions spent year year on interactive ads for financially-related services (Among the top 15 digital advertisers in 2008 were Scottrade, Tree.com, TD Ameritrade Holding Co, Bank of America, FMR Corp, Experian, etc.). The IAB is clearly afraid of having an agency that would be empowered to investigate how online marketers sell and promote a wide range of financial products online.

We do wonder whether IAB board members that support the Obama Administration’s proposal (which is widely backed by consumer groups) understand the implications of the position it has taken.  Personally, I believe the creation of the new agency is critically important.  We must ensure that American consumers are never again victims when buying financial products.  Given that most of us will be learning about and purchasing financial services online, the proposed new agency will have to address how a number of IAB’s members engage in digitally-delivered financial services.

A Microsoft/Yahoo! Deal will Raise Privacy and Competition Issues [Annals of Behavioral Targeting Mergers]

Microsoft and Yahoo!  should expect privacy and consumer groups to vigorously press regulators to closely and skeptically examine any deal–and at the very least urge them to impose a series of tough conditions on data collection and ad practices.  This digital duo will not get a free data collection pass from privacy and consumer groups, even if a new combination would provide much needed competition to Google.  Microsoft and Yahoo have created elaborate data collection services across platforms and applications, including for behavioral targeting.  They have competing ad targeting businesses in search, display and mobile, for example.  Both companies operate leading ad exchanges (where our profile data is bought and sold like food commodities). They also have competing ad targeting research and development efforts. Beyond the US, there are important competition and privacy issues for the EU as well.

A merger that further concentrates control by a dwindling very few over the digital marketing and advertising business illustrates how quickly consolidation has emerged as a principal and worrisome feature of the Internet era.

Progress & Freedom Foundation Comes to Aid of its Data-Collecting Backers (Using a `save the newspapers’ as a ploy to permit violations of consumer privacy protection!)

This report from Internetnews.com on the Progress and Freedom Foundation’s “Congressional” briefing illustrates how desperate some online marketers are that a growing number of bi-partisan congressional leaders want to protect consumer privacy.  So it’s not surprising that some groups that are actually financially supported by the biggest online marketing data collectors in the world would hold a Hill event to help out the friends who pay their bills.

It should have been noted in Ken Corbin’s that Google, Microsoft, Time Warner (AOL), News Corp. (MySpace) financially back the Progress and Freedom Foundation (PFF).  Other behavioral data targeting `want to be’s’ who monopolize U.S. online and other platforms are also backers:  AT&T, Comcast, NBC, Disney/ABC, Viacom/MTV/Nick, etc. For a list, see here.

PFF and some of its allies deliberately distort the critique of consumer and privacy groups.  We are not opposed to online marketing and also understand and support its revenue role for online publishing.  But many of us do oppose as unfair to consumers a stealth-like data collection, profiling and ubiquitous tracking system that targets people online.  One would suppose that as a sort of quasi-libertarian organization, PFF would support individual rights.  But given all the financial support PFF gets from the major online data collectors, how the group addresses the consumer privacy issue must be viewed under the `special interests pays the bills’ lens.

PFF and its allies are playing the ‘save the newspaper’ card in their desperate attempt to undermine the call for lawmakers to protect consumer privacy.  Newspapers and online publishers should be in the forefront of supporting reader/user privacy; it enhances, not conflicts, with the First Amendment in the digital era.  Finally, PFF’s positions on media issues over the years has actually contributed to the present crisis where journalism is on the endangered species list.  This is a group that has worked to dismantle the FCC, eliminate rules designed to foster diverse media ownership, and undermine network neutrality.

PS:  The article quotes from Prof. Howard Beales of George Washington University (and a fCV,ormer Bush FTC official with oversight on privacy).  Prof. Beales was on the PFF panel.  Prof. Beales, according to his CV has served as a consultant to AOL and others (including  Primerica and the Mortgage Insurance Companies of America).  Time Warner, which owns AOL, is a PFF financial backer.  All this should have been noted in the press coverage.

Consumers Union Tells Congress that FTC should do more work on “Online Behavioral Marketing… to protect consumer privacy”

Here’s an excerpt from today’s testimony by CU’s Gail Hillebrand before the House Commerce Committee’s consumer protection subcommittee.  The hearing was on the role of the FTC as a new (and much needed) Consumer Financial Products Protection Agency is potentially created.  The testimony was endorsed by other leading consumer groups, including Consumer Federation of America, Public Citizen and US PIRG.

Online Behavioral Marketing – More must be done to protect consumer privacy.
Consumers are being asked to pay a heavier and heavier price in order to take advantage of the full range of goods and services offered through the Internet, as marketers, researchers, data-mining companies and even service and content providers create profiles of personally identifiable information based on consumer behavior.  Internet service providers, content providers and vendors must take greater responsibility in considering the collateral impact their behavioral tracking models have on consumers.
The FTC should:
• investigate the online marketplace in light of new developments in the data mining field;
• expose marketing practices that compromise user privacy;
• issue the necessary injunctions to halt current practices that abuse consumers; and
• adopt policy principles outlining what can be considered technology neutral Fair Information Practices.

Online Consumers Require Real Privacy Safeguards, Not the Digital Fox [AAAA, ANA, BBB, DMA & IAB] in Charge of the Data Hen House

The self-regulatory proposals released today [2 July 2009]  by five marketing industry trade and lobby groups are way too little and far too late. This move by the online ad industry is an attempt, of course, to quell the growing bi-partisan calls in Congress to enact meaningful digital privacy and consumer protection laws. It’s also designed to assuage a reawakened Federal Trade Commission–whose new chair, Jon Leibowitz, recently appointed one the country’s most distinguished consumer advocates and legal scholars to direct its Bureau of Consumer Protection (David Vladeck). The principles are inadequate, even beyond their self-regulatory approach that condones, in effect, the “corporate fox guarding the digital data henhouse.” Effective government regulation is required to protect consumers. We should have learned a painful lesson by now with the failure of the financial industry to oversee itself. The reckless activities of the financial sector—made possible by a deregulatory, hands-off government policy–directly led to the current financial catastrophe. As more of our transactions and daily activities are conducted online, including those involving financial and health issues–through PCs, mobile phones, social networks, and the like–it is critical that the first principle be to ensure the basic protection of consumer privacy. Self-dealing “principles” concocted by online marketers simply won’t provide the level of protection consumers really require.

The industry appears to have embraced a definition of behavioral targeting and profiling that is at odds with how the practice actually works. Before any data is collected from consumers, they need to be candidly informed about the process–such as the creation and evolution of their profile; how tracking and data gathering occurs site to site; what data can be added to their profile from outside databases; the role that data targeting plays on so-called first-party websites, etc. In addition, the highest possible consumer safeguards are necessary when financial and health data are involved. Under the loosey-goosey trade industry principles, however, only “certain health and financial data” are to be treated as a “sensitive” category. This would permit widespread data collection involving personal information regarding our health and financial concerns. The new principles, moreover, fail to protect the privacy of teenagers; nor do they seriously address children’s privacy. (I was one of the two people that led the campaign to enact the Children’s Online Privacy Protection Act).

The failure to develop adequate safeguards for sensitive consumer information illustrates, I believe, the inability of the ad marketing groups to seriously address online privacy. The so-called “notice and choice” approach embraced by the industry has failed. More links to better-written privacy statements don’t address the central problem: the collection of more and more user data for profiling and targeting purposes. There needs to be quick Congressional action placing limits on the collection, use and retention of consumer data; opt-in control over profile information; and the creation of a meaningful sensitive data category. Consumer and privacy groups intend to work with Congress to ensure that individuals don’t face additional losses due to unfair online marketing practices.

[press statement by the Center for Digital Democracy]