Category: Uncategorized

CDD Statement on Facebook’s new privacy settings [Digital Deja-vu Dep’t!]

Facebook made some positive changes today, but only because of political pressure from policymakers and privacy advocates on both sides of the Atlantic.  Mr. Zuckerberg’s failure to acknowledge the political realities don’t bode well for Facebook’s future approach to privacy.  He appears to be living a Alice in Digital Wonderland fantasy, where changes are made on privacy only because Facebook has the goodwill of its users in mind.  Just last December 9, after all, Facebook made one of its typical self-reverential announcements that it was “rolling out easy-to-use tools to empower people to personalize control over their information.”  These changes triggered a user revolt, letters from Senators, an opinion ordering a reversal from the EU, and concern from the FTC.

There are more simplified and manageable privacy settings, and Facebook has made an important first (or back-tracking!) step.  Unfortunately, Facebook still refuses to give its users control over the data it collects for its targeted advertising products.  The defaults should also be initially set for non-sharing, with the minimization of data collection at the core of Facebook’s approach to privacy.   CDD and other privacy groups will examine these new settings and identify where further changes should be made, including on advertising data.  Meanwhile, we want Congress to hold hearings on social networking privacy, with Mr. Zuckerberg as a star witness.  Mr. Zuckerberg should be asked to explain how Facebook continues to develop new approaches to data collection and privacy–from Beacon to Instant Personalization–that continually lowers the bar–until the company has to do some form of hasty retreat.   Congress needs to examine how Facebook develops its approach to privacy, and what its business plans mean for the future.

CDD will also press the FTC to investigate Facebook, including acting on complaints filed with EPIC and other groups.  It’s time for the FTC to announce guidelines to protect social networking privacy on Facebook and other sites.
Jeffrey Chester
Center for Digital Democracy
jeff@democraticmedia.org

Online ad research done by Profs. Goldfarb and Tucker: fails to address how online marketing really works– and also its implications for privacy, consumer protection and civil liberties

Whenever an industry is in political trouble, there is usually research made public that supports its position.  Often, the research is actually funded by the very companies or trade associations involved in the political fight.  The new paper “Privacy Regulation and Online Advertising” just released by Professor Avi Goldfarb [U of Tornoto] and Catherine E. Tucker [MIT], appears designed to discourage Congressional and FTC policymakers from enacting privacy safeguards.  In this case, according to the authors, the paper wasn’t funded by industry.  But in response to my question, Professor Tucker explained that “we have received funding in the past (for other work on internet advertising) from the NET Institute and from a Google/WPP Marketing Research Award. Avi has also received funding Bell Canada.“  The Net Institute’s board, btw, includes employees of Microsoft and Google, among others.

The new report is already being touted as evidence of the cost to online marketers if privacy rules are enacted.  But the study is very problematic–and I believe fails to really analyze how online marketing works.  The authors examined the impact of privacy rules in the EU and claim they have negatively impacted the effectiveness of online ads.  But by only examining banner ads, they miss the point.  Online marketing in both the EU, U.S., and elsewhere is really an integrated system involving an array of applications and techniques [where data is collected and used at all points]–from viral, to online video, social media, neuromarketing, games, mobile, etc.  Indeed, at our CDD we follow the EU market very closely–including collecting data from EU based online marketers, trade associations, case studies, etc.  These reports indicate tremendous success for online ads (and ironically, much of the innovation for online marketing comes out of the UK;  Admap just reported it’s the German marketers in the forefront of neuromarketing).

Given the study’s discussion of the Boucher bill, it’s clear there is a political motivation here.  But the main fault is how the study misses the key questions and ignores how the market really works.  This paper needs to be revised and gets an incomplete!

PS:  Btw, I also told the authors that Leslie Harris of CDT is a woman.  They had her as Mr. Harris.  Perhaps they also need a better fact-checker.

Behavioral Targeting for fast food: Brought to you by Yahoo! and Dunkin Donuts

]How would customers–even for donuts– feel if they knew their information was collected so they could be profiled, tracked and targeted.  Read this excerpt from a new case study released by Yahoo!

Data becomes important in not only knowing what the customer wants, but also for getting them through the door. So Dunkin’ Donuts went online with a national Yahoo! campaign to gather data to drive in store sales; a strategy that franchisees can also use at the local level…The company primarily gathers its purchase behavior data through its Dunkin’ Donuts Perks Card (DD Perks), a rechargeable loyalty card that tracks data such as transaction amounts and time of day for purchases. Dunkin’ Donuts analyzes this data along with the information it gathers about its customers through website enrollments, gift card registrations, and point-of-purchase promotions to drive sales…Dunkin’ Donuts turned to Yahoo! because online marketing provided more accountability and engagement for the campaign…“You will know exactly how many people enrolled and how much you spent. You also know that it’s an efficient spend because you know those people are engaged, they opted in to get that communication, so they’re more likely to pay attention. Online is a persuasive tool, rather than a blunt instrument like broadcast,” says Tryder [David E. Tryder, Director of Interactive & Relationship Marketing at Dunkin’ Donuts].  Yahoo! helped Dunkin’ Donuts run a 41 day display campaign with promotions to encourage customers to enroll in its DD Perks program. Yahoo! Account Manager Steven Schmitt worked with Dunkin’ Donuts to implement behavioral targeting and to continually optimize the campaign to increase its performance.  The campaign garnered over 16,000 sign-ups and through continual optimization, enrollment increased 300% between the first 14 days and the last 14 days of the campaign…With demographic, geographic, and behavioral targeting, Yahoo! can help Field Marketing Managers and franchisees go online and provide that relevant and local messaging for consumers.

Perking up Dunkin’ Donuts Perks.   Yahoo Advertising.  May 18, 2010

Google to Host Online Ad Lobby as it Campaigns Against Privacy bill

Google is going to help the interactive ad lobby in its campaign to undermine privacy legislation.  The Interactive Advertising Bureau (IAB) plans a DC lobbying blitz on June 14-15, bringing in its cadre of small publishers.   As the IAB explains, “our day of advocacy gets underway as you divide up into teams for individual meetings with members of Congress and their staffs. Each team will be assigned a “chaperone” to help you make your way around the Hill, as well as answer any questions you might have.”

The message the IAB reps will make will undoubtedly be that the Internet way of life as we know it will end if Rep. Boucher’s proposal–or most any other bill protecting privacy–is enacted.  Sort of the Internet meets the film 2012:  all that will be left, if the data stops flowing for targeting, will be a handful of digital survivors.  Google, which serves on the executive committee of the IAB board [along with Microsoft, NBCU, Disney, CBS], plays a key role in the lobbying plans.  The small publisher/lobbyists are to be “guests of honor at a special networking reception and dinner at the Google offices in Washington, D.C.”  Presumably, at the “Cocktail Reception & Dinner – Courtesy of Google,” the troops will be rallied to the `defeat the privacy bill’ cause.  A guest speaker at Google HQ for the event is the IAB CEO Randall Rothenberg.

I know Google uses its facilities to host many meetings;  I have had lunch there and a dinner once at events where Google was discussing its data collection practices.  But Google claims to want to see meaningful national privacy legislation.  Yet they are aiding and abetting the anti-online privacy lobby (which is also leading the effort to undermine the FTC’s role in consumer protection).  The irony here is that Google appears to have successfully convinced Mr. Boucher that its ad preference manager system should be the basis for a safe harbor in the bill.  But Google likely wants to facilitate weakening even Mr. Boucher’s proposal–hence the dinner, drinks and cheer leading that will no doubt be heard across to Capital Hill next month.

Boucher/Stearns Privacy Bill: Fails to Ensure Data Collection Minimization and Forces Consumers to rely on Digital ‘fine’ Print

Yesterday, Reps. Rich Boucher and Clifford Stearns released a “discussion” draft for what they intend to become a new law addressing privacy online.  Mr. Boucher, whom I and a number of consumer and privacy representatives met with in March, is sincere in his desire to address online privacy.  But the bill’s overall orientation maintain (and really nurtures) the intense and pervasive data collection, online profiling, and targeting status quo.  Instead of focusing the goal of the bill on data minimization, a important Fair Information Principle, it really enables the maximization of information collection on consumers.

The bill does make several important contributions, including acknowledging that racial/ethnic and sexual orientation must be considered  “sensitive” information requiring higher safeguards [I played a role in urging Congressional leaders to include racial/ethnic data in the sensitive category].  By acknowledging that a “unique persistent identifier” should be classified as personal information, the draft bill follows what policymakers in the EU have crafted (and the FTC staff has already largely suggested).

But by primarily relying on so-called “notice and choice”–namely privacy policies–the bill fails to protect online users.  There is a growing consensus, backed by research, that privacy policies are inadequate.  The reliance by Mr. Boucher on Google’s ad preference manager system, which allows users to opt-out of more specific ad targeting categories, doesn’t address the key question:  how can we ensure less information is collected and used about each of us.  Nor does the bill protect sensitive information involving health and finance, where it permits a huge loophole that will continue online data practices involving our interactions online with financial and health related sites and services].  Adolescents are left unprotected in the bill–one of its most glaring omissions.

The bill doesn’t really empower the FTC to act effectively in this area, in our opinion.  Under the Boucher/Stearns bill, consumers will still have to rely on digital fine print–written in invisible ink–to protect privacy.  This is not a debate on ensuring online ad revenues for free content–we all support that.  It’s about defining reasonable rules of the online road that balances citizen and consumer rights with the interests of those who collect our data–whether they be commercial or government.

Interactive Ad lobby Gives $ to Lawmakers to head-off consumer privacy safeguards….The Google connection

The ever intrepid reporter Kate Kaye from Clickz has reported the following [excerpt]:

The Interactive Advertising Bureau is putting its PAC money where its mouth is – again. As part of its ongoing efforts to influence key lawmakers, the lobbying arm of the online ad industry’s largest membership organization gave Congressman John Dingell, an influential member of the House Energy and Commerce Committee, $1,000 last month. Among the messages the IAB hopes to get across to legislators: behavioral targeting is so pervasive, even their own election campaigns probably use it….

Other recent fundraising events for the congressman include an annual pheasant shoot held in Boonsboro, MD.

“It doesn’t hurt that Google also has a major office in his congressional district,” added Zaneis. Dingell represents Michigan’s 15th district, home to Google’s Ann Arbor office, which coincidentally houses Google’s political ad sales team…The IAB PAC contributed to Boucher’s reelection campaign in 2009, and to other House Internet Subcommittee members including Mike Rogers and John Shimkus.

IAB Lobby Gives to Lawmaker to Influence Behavioral Ad Policy.  Kate Kaye, ClickZ, Apr 22, 2010

Facebook Tells Big Advertisers: We’re not “a pure social media site”

That’s what Facebook’s “Chief Revenue Officer” Mike Murphy told big brands like Coca Cola and Pepsi  at an invitation only event focused on better targeting teens and young adults.  The “PTTOW! Youth Media Summit is an annual, invite-only conference focused on the trillion dollar young adult market.  Bringing together the top marketers from the world’s most innovative companies, the event serves as a high-level forum for discussing youth media, marketing and culture across every major industry category.”

Facebook was there pitching its wares, helping big brands better target its users.  Mr. Murphy is quoted as saying that its Fan pages have become “a sustainable asset even after the campaign ends.” We all know that Facebook needs ads to thrive.  But it has to become honest with its users–and privacy and consumer protection policymakers–about the data it collects and how it’s used.  It’s also useful to know that Facebook doesn’t see itself only as a social media site–because it’s really part of online marketing [including increasingly for food and beverages linked to the global youth obesity crisis].

Rep. Ed Markey: Protect Children’s Privacy Online via COPPA

Rep. Ed Markey has been a longstanding leader in Congress on children’s media issues, and was the original co-sponsor of the Children Online Privacy Protection Act (COPPA).  Here’s what he released yesterday to coincide with the Senate Commerce committee oversight hearing.


MARKEY: KEEP CHILDREN’S PERSONAL INFORMATION OUT OF THE ONLINE COMMERCIAL ‘COOKIE JAR’

WASHINGTON, D.C. – Representative Edward J. Markey (D-Mass.), a senior member of the House Energy and Commerce Committee and co-Chairman of the Bi-Partisan Congressional Privacy Caucus, issued the following statement on Senate Commerce Consumer Protection, Product Safety, and Insurance Subcommittee hearing on the Children’s Online Privacy Protection Act (COPPA):

“More than a decade ago, I joined with Sen. John McCain (R-Ariz.) and then Sen. Richard Bryan (D-Nev.) to enact the Children’s Online Privacy Protection Act,” said Markey. “COPPA was a landmark piece of legislation that has contributed to the creation of a safer and healthier online environment for children.  It established a clear set of rules for marketers to follow and gave parents tools for overseeing how their children’s information was being collected and used online. It also helped to tame the digital ‘wild west’ of the information superhighway-where personal information was routinely collected from unsuspecting kids on the Internet.

“COPPA faces new challenges today.  The growth of broadband and the proliferation of mobile phones give marketers a new generation of powerful techniques for data collection and behavioral profiling.  I commend the Subcommittee for holding this important hearing on children’s privacy in the digital age.  I urge them to ensure that the Federal Trade Commission, as it reviews COPPA this year, makes necessary changes to its implementation that will permit the law to   remain an effective safeguard.

“We deliberately wrote COPPA to make it a “living” and flexible statute, so it could address new data collection and targeting practices that threatened to undermine children’s privacy as the Internet evolved.  I will work with the Senate and the FTC to ensure that COPPA continues to protect children in the expanding digital marketplace.”

Facebook: Fess Up and Tell Us Who Your Outside Lawyers and Lobbyists Are


There’s an irony that for a company which thinks privacy is passé, they won’t reveal to the press whether they have engaged the services of former FTC Chair Tim Muris.  That’s what we have heard from a number of reporters over the last several days.   It’s no coincidence, in our opinion, that Facebook has allegedly engaged Mr. Muris to represent them at the FTC while he is helping lead the campaign against congressional proposals to strengthen that consumer protection agency.  Facebook’s new data collection system, including its “Like” application, doesn’t face the kind of regulatory scrutiny it requires–given the FTC’s current political fight and regulatory weakness. Bravo to Sen. Schumer and the other Senators who are asking for action.

Tim Muris, the Facebook Connection, and the FTC: The Need for Disclosure in the debate over Protecting Consumers Online

Former Bush FTC Chair Tim Muris is helping lead the charge against proposals that would ensure the FTC can be an effective consumer protection agency.  His critique of Obama and House-backed proposals in the financial reform bill that gives the FTC the ability to act on behalf of consumers is being cited by some in Congress.  Muris is trotting out the tired refrain that the FTC would not act responsibly if given the same rulemaking authority almost every federal agency has.  He suggests that the FTC would–horror!–actually protect children from junk food ads [1 out of every 3 kids in America is obese–and ads play a role] and also ensure our privacy is protected online.  When you think privacy, think about all the things you do using the Internet–involving your money, health, family/kids–and remember that digital marketers are eavesdropping on what you do–and selling that information to the highest bidder.

But two sources tell us that Mr. Muris is representing Facebook at the FTC–he is a lawyer at O’Melveny and Myers.  Facebook is now the subject of a FTC complaint by privacy groups, as well as the growing focus of data protection commissioners.  When Mr. Muris speaks about the FTC, especially his concerns that if given the ability to enact safeguard rules it would address privacy and online marketing, it is extremely relevant that he has at least one client allegedly involved.  During his tenure at the FTC, Mr. Muris relied primarily on industry self-regulation when it came to protecting privacy online.  That posture has resulted in consumers being victimized by a data collection “wild west,” which even industry now admits.  Facebook’s work with Mr. Muris places the social network service in the company of those working to defeat safeguards to protect America’s kids from ads that promote obesity. Given Facebook’s own growing role as a fast food advertiser, questions need to be raised about their involvement fighting FTC consumer protection proposals.  It is also another area where Mr. Muris needs to acknowledge his own commercial connections.