Facebook and Privacy: Why the FTC and EU Have to Become Our Real “Privacy Wizards”

Facebook is a very valuable tool.  But its effort to harness more of its member data–and cloak it as a “privacy” approach–illustrates how out of touch Facebook is with the fundamental concept of personal privacy.  That’s why the FTC and EU Privacy commissioners have to step in and act as Facebook’s true “privacy wizard.“  Left on its own, with its business interests driving Facebook to make our information available to them and their business partners, the privacy of 100 million US users (and even more globally) are at risk.  Facebook cavalier approach that your “name, gender, current city, networks, Friend List and Pages” is considered by them “publicly available information” illustrates this.  Facebook has framed these changes as beneficial to users, claiming that its “new, simplified privacy settings giver you more control over the information you share.”   Classic PR doublespeak with a Silicon Valley accent.

We have raised concerns about Facebook in the past–especially with Beacon and also with the third party apps (my CDD played a leading role providing information on the data collected by third party applications to the leading Canadian privacy group).   I asked Facebook officials to brief me and other privacy groups on the recent changes: that briefing was on Wednesday.  I wanted Facebook to explain how its new privacy approach allowed its users to control data mined by Facebook and its third party developers used for interactive advertising and marketing. I was so appalled by what Facebook officials said at that meeting that, after some additional research into Facebook’s plans, my Center for Digital Democracy decided to join with EPIC and others in a complaint to the Federal Trade Commission.

I was flabbergasted to hear Facebook officials claim that its new changes actually reflected “Fair Information Principles” for privacy. That in their view the concept of privacy has “evolved,” with users wanting to share all their information via what they call the “social graf.” Facebook officials said that only a few people (implying privacy advocates) wanted to have control over their information. That they didn’t consider allowing users to control the data collected on them for marketing and advertising purposes as part of a privacy regime.  Data used for advertising–even to Minors–is considered outside of what a person should be able to control, in Facebook’s view.   They also suggested that those who didn’t appreciate what they called its privacy “permission” model were out of step.

Nothing was said by Facebook officials about the company’s real motivations for expanding its access to its user data (as if business reasons had nothing to do with Facebook’s approach to member privacy!).  As InsideFacebook recently explained, “Last week, Facebook launched a major initiative geared towards getting users to share more information more openly…However, while many people don’t want to share much information publicly online today, some do. For those people, Facebook’s historical default privacy settings did not make it the right product for them. As a result, Facebook recognized that its default-private model made it vulnerable to other services with default-public models, like Twitter…Facebook’s decision to make the recommended privacy options for profile data like “Family and Relationships” and “Posts I Create” be set to “Everyone” – as well as its move to remove privacy controls for Gender, Current City, and Friends – were pretty aggressive by almost anyone’s standards. In particular, its decision to present users with a binary choice between “Everyone” and “Old Settings” for some privacy preferences was especially confusingly executed…Facebook isn’t satisfied with a mostly-private platform: it wants to be the single place where both sensitive personal information is shared and public memes spread…Facebook has shown, as recently as a few months ago with its launch of the “real-time” stream as the default News Feed, followed by its decision a few months later to go back to the algorithmic News Feed, that it is capable of making suboptimal product decisions due to intense feelings about services like Twitter…”

Relevant too are Facebook’s plans to enable its third party developers to gain access to more of its member data, including their email addresses.  As Facebook explains on its “Roadmap” for developers, “We’re excited to announce that you will soon have the ability to ask users for their primary Facebook email addresses, providing you with a direct channel to communicate with your users.” At our briefing, Facebook officials said they were soon addressing third party apps and their access to data.  But given Facebook’s failure to protect basic user privacy, we have serious doubts it will deal with data access by its developers.

CDD will be working to educate the FTC, EU privacy officials and others.  Facebook is consciously devaluing the notion of privacy for its own interests.  How Facebook deals with user data–including what is used for advertising–will be on the policy agenda.  The complaint from EPIC, Consumer Federation of America, Privacy Rights Clearinghouse, CDD and others opens the door for a serious examination of Facebook’s data collection practices.

Consumer and Privacy Groups at FTC Roundtable to Call for Decisive Agency Action

Washington, DC, December 6, 2009 – On Monday December 7, 2009, consumer representatives and privacy experts speaking at the first of three Federal Trade Commission (FTC) Exploring Privacy Roundtable Series will call on the agency to adopt new policies to protect consumer privacy in today’s digitized world. Consumer and privacy groups, as well as academics and policymakers, have increasingly looked to the FTC to ensure that Americans have control over how their information is collected and used.

The groups have asked the Commission to issue a comprehensive set of Fair Information Principles for the digital era, and to abandon its previous notice and choice model, which is not effective for consumer privacy protection.

Specifically, at the Roundtable on Monday, consumer panelists and privacy experts will call on the FTC to stop relying on industry privacy self-regulation because of its long history of failure. Last September, a number of consumer groups provided Congressional leaders and the FTC a detailed blueprint of pro-active measures designed to protect privacy, available at: http://www.democraticmedia.org/release/privacy-release-20090901.

These measures include giving individuals the right to see, have a copy of, and delete any information about them; ensuring that the use of consumer data for any credit, employment, insurance, or governmental purpose or for redlining is prohibited; and ensuring that websites should only initially collect and use data from consumers for a 24-hour period, with the exception of information categorized as sensitive, which should not be collected at all. The groups have also requested that the FTC establish a Do Not Track registry.

Quotes from Monday’s panelists:

Marc Rotenberg, EPIC: “There is an urgent need for the Federal Trade Commission to address the growing threat to consumer privacy.  The Commission must hold accountable those companies that collect and use personal information. Self-regulation has clearly failed.”

Jeff Chester, Center for Digital Democracy: “Consumers increasingly confront a sophisticated and pervasive data collection apparatus that can profile, track and target them online. The Obama FTC must quickly act to protect the privacy of Americans,including information related to their finances, health, and ethnicity.”

Susan Grant, Consumer Federation of America: “It’s time to recognize privacy as a fundamental human right and create a public policy framework that requires that right to be respected,” said Susan Grant, Director of Consumer Protection at Consumer Federation of America. “Rather than stifling innovation, this will spur innovative ways to make the marketplace work better for consumers and businesses.”

Pam Dixon, World Privacy Forum: “Self-regulation of commercial data brokers has been utterly ineffective to protect consumers. It’s not just bad actors who sell personal information ranging from mental health information, medical status, income, religious and ethnic status, and the like. The sale of personal information is a routine business model for many in corporate America, and neither consumers nor policymakers are aware of the amount of trafficking in personal information. It’s time to tame the wild west with laws that incorporate the principles of the Fair Credit Reporting Act to ensure transparency, accountability, and consumer control.”

Written statements and other materials for the roundtable panelists are available at the following links:

CDD/USPIRG: http://www.democraticmedia.org/node/419

WPF: http://www.worldprivacyforum.org/pdf/WPF_Comments_FTC_110609fs.pdf

CFA: http://www.consumerfed.org/elements/www.consumerfed.org/File/5%20Myths%20about%20Online%20Behavioral%20Advertising%2011_12_09.pdf

EPIC: www.epic.org

Games Microsoft Plays: “consumer online behavior” tracked on its video gaming service [a “massive” invasion of privacy!]

Microsoft’s just announced a new consumer tracking and profiling tool for advertisers using its Massive video gaming platform service. Calling it a “breakthrough” in its press release, the new Microsoft/comScore research tool enables advertisers:

“… to see the direct impact that in-game advertisements have on consumer online behavior…, advertisers will get an inside look at the degree to which in-game ads motivate gamers to visit Web sites, conduct brand-related search queries and engage in other online actions, something that previously had gone unmeasured…Through this collaboration with comScore, we will also now be able to measure those consumer actions that result from in-game ads. We think this has the potential to literally ‘change the game’ for both advertisers and publishers who want to improve the effectiveness of their in-game ad efforts.”

AdEffx Action Lift for Gaming matches in-game console ad serving data from Massive with comScore’s third-party, post-campaign panel data to track and measure in-game advertising effectiveness. By combining Microsoft’s proprietary, non-personally identifying Anonymous ID data, which is common across Xbox LIVE and Microsoft Web properties (known as Windows Live ID), with user data from comScore’s panel of 2 million Internet users worldwide, comScore can determine if panelists who saw in-game advertising subsequently visited a brand’s Web site, searched brand-related terms or engaged in other online behaviors important to advertisers.”

Google+AdMob=Mobile Privacy Issues for the FTC. Questions should be raised about mobile targeting via “ethnicity”

The Federal Trade Commission should examine the privacy issues connected to the Google/AdMob deal.  As we informed the FTC yesterday, AdMob says it can target via “age, gender, HHI, ethnicity, education & context.”

The CDD/USPIRG complaint on mobile advertising provides useful analysis. Here’s an excerpt on its discussion about AdMob:

AdMob: “Mining All the Data We’ve Captured”
AdMob is a “mobile advertising network” seeking to “target mobile users and monetize mobile traffic.” There is inadequate notice and little opportunity to opt-out of this data- gathering. Few mobile users realize that their communications and actions are monitored and recorded in order to create intimate profiles for marketing purposes.
AdMob also targets the youth demographic. It segments “market audiences” into several categories, including a “Digital Natives” category, which include boys and girls as young as 13.  AdMob also focuses on social networking sites, claiming it “enables developers to monetize Facebook mobile applications by integrating AdMob’s industry-leading mobile publishing solutions into any Facebook mobile application. Developers building mobile web applications for the Facebook community using the Facebook Platform for Mobile can easily integrate the AdMob code to start serving ads….”

And AdMob is continually seeking to mine and monetize the data gathered on unsuspecting youths and other mobile users. AdMob’s CEO Omar Hamoui admitted, “We are investing a fair amount of development resources into mining all the data we’ve captured over the last 12 months of ad serving and targeting.”

AdMob gathers this data (and targets youths) without adequate notice to the consumer, making it difficult for a mobile user to weigh the costs and benefits and choose whether to opt out of this profiling. This constitutes unfair and deceptive practices, and the Federal Trade Commission should scrutinize these actions.

“Cookie Wars, Real-Time Targeting, and Proprietary Self Learning Algorithms: Why the FTC Must Act Swiftly to Protect Consumer Privacy”

That’s the title of comments filed at the U.S. Federal Trade Commission by my Center for Digital Democracy and U.S. PIRG.  I also just gave a presentation with the same name at last week’s meeting of data protection commissioners in Madrid, Spain.   It’s available here.

Here’s an excerpt:   Today, consumers online face the rapid growth and ever-increasing sophistication of the various techniques advertisers employ for data collection, profiling, and targeting across all online platforms. The growth of ad and other optimization services for targeting, involving real-time bidding on ad exchanges; the expansion of data collection capabilities from the largest advertising agencies (with the participation of leading digital media content and marketing companies); the increasing capabilities of mobile marketers to target users via enhanced data collection; and a disturbing growth of social media surveillance practices for targeted marketing are just a few of the developments the commission must address. But despite technical innovation and what may appear to be dramatic changes in the online data collection/profiling/targeting market, the commission must recognize that the underlying paradigm threatening consumer privacy online has been constant since the early 1990’s. So-called “one-to-one marketing,” where advertisers collect as much as possible on individual consumers so they can be targeted online, remains the fundamental approach.

Online Ad Networks Targeting Teens: Time for new privacy safeguards

Teens are a major focus of online advertising.  We have asked Congress and the FTC to develop safeguards to ensure adolescents have their privacy protected.  As part of the public debate, it’s useful to review how online ad networks target teen users.  Here are some examples:

Betawave (its 12-17 targeting service):  “If it feels like it’s impossible to capture the attention of today’s short-attention-span teenager, we’d beg to differ. On average, teenagers spent 15 mins per session on our publisher sites and 73.7 mins per month. More importantly, their mindstate is highly receptive to advertising with stats 118% higher than industry average and 158% more likely to agree that advertisements influence their purchase decisions…What’s our secret? Our selection of casual games, virtual worlds, and social play sites that are in touch with their Teen and Tween audiences. We know how to create content to hold the attention of the American Teenager, but to also keep them coming back for more…Our Teen and Tween audience consumes all types of different media, but is addicted to the Internet. The content of our sites appeal to the “Influencers” — the kids who assert their preferences with parents and peers and impact the behavior of others…“Virtual World Integration:  Imagine a marketing vehicle where users embrace sponsorship, where they constantly ask for more brands, and where advertising is seen as a validation of their community. Virtual worlds offer this experience to savvy marketers…Integrate your product into virtual worlds, and turn casual observers into brand champions.”

Kiwibox teen network [Burst Network]:  Kiwibox Teen Network, brought to you by Burst Network, is the premier online vehicle for advertisers looking to target the teenage audience of girls and guys that are currently in high school or college. The anchor site for the network, Kiwibox.com, is a popular social networking destination and online magazine for teens…

As a member of Kiwibox Teen Network, your site will get the attention of popular brand marketers and attract high CPM campaigns. Advertisers on Kiwibox Teen Network will include the best brand names in consumer electronics, telecom, entertainment, apparel/footwear, snacks and beverages, retail, beauty products, and fast food…Kiwibox Teen Network supports several types of Rich Media layer ad units, including Interstitials, Superstitials, Floating, Synchronized and In-Person Rovion ads. We have partnerships with the top Rich Media vendors like PointRoll, Eyewonder, EyeBlaster, Unicast, Interpoll, and Atlas…

Google & ad giant WPP search for scholars who can help them better target teens, mobile users, and promote pharmaceutical brands

For the second year, Google and global ad conglomerate WPP are searching for academics who will apply for their Marketing Research grants.  A look at some of the topics that are listed as “of interest” should help provide you with a better picture of the `brought to you by interactive advertising’ digital world to come:

excerpt:  Google and the WPP Group have launched the 2nd round of the research program they jointly created to improve understanding and practices in online marketing, and to better understand the relationship between online and offline media…

Topics of interest include, but are not limited to, the following:

Online and offline media interaction

  • How does a brand establish a framework for assessing how much should be spent online? How much advertising should be directed at brand development versus specific click generation?
  • How does offline media affect search and vice versa?
  • What are the best models for mobile advertising?…
  • What are good guidelines for moving traditional video spots from broadcast to broadband?…
  • What is the causal relationship between brand health and search success? And what is the link between search and sales? How does search contribute to word of mouth recommendation?…
  • How do you model the consumer response to digital advertising in social networks or mobile media?…
  • How can advertisers be welcome in social networks?
  • How should online audiences and online marketing tactics be measured in emerging markets – Asia, Eastern Europe, Latin America? Does mobile hold the upper hand over online in some markets?…
  • How do teens interact with digital media and what are the implications?
  • Should heavy internet users be given different treatment than light users?
  • How influential are online influencers and what categories of consumers/behaviors are most affected by them?…
  • How can pharmaceutical brands engage more effectively online? How should marketers approach creative development given the full/risk disclosure requirements?
  • What are the unique marketing and targeting opportunities for other verticals: financial services, insurance, entertainment, consumer goods, retail, etc?
  • How do consumers interact with the mobile web and what are the opportunities for retail (coupons, QR codes, etc) within mobile?…
  • What is inhibiting mobile advertising and how can it be overcome? What is the role of mobile advertising in a new marketing communication strategy?

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