Commentary

Whose Data Is It Anyway?

The battle for ownership and control of consumer data on the Internet took center stage last week when AT&T announced that it is changing its privacy policy. Now, the teleco giant will classify consumer Internet browsing patterns, including personally identifiable information, as AT&T proprietary "business records," thus subjecting the collected data to whatever use or disclosure that AT&T deems appropriate or necessary for the conduct of its business. In other words, AT&T has told consumers that it owns their data and can do what it wants with it. As you might imagine, this has created quite a stir, and not just from those folks who typically follow consumer privacy issues.

Why so much attention? Five reasons for sure.

The NSA issue. The announcement occurred only months after allegations that a number of telecommunications companies, including AT&T, may have secretly turned over personal consumer telephone records to the National Security Administration (NSA) as part of its post-9/11 anti-terrorism effort. These allegations have already led to a number of consumer-driven lawsuits to understand the nature and scope of the data disclosures.

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Net neutrality. The announcement occurs just as legislation is being considered in Washington that would give regulated telecos like AT&T new capabilities to provide digital video to their consumers without the approval of local governments and without any restrictions on setting up content toll roads on their regulated infrastructure. This issue is of particular importance since several of the telecos are already on record that they intend to begin charging fees to content companies and search engines if they don't want their content slowed down as it is accessed by consumers. An attempt to create a level playing field and force telecos to treat all content equally, so-called Net neutrality, has already been shot down in the House of Representatives.

Stolen laptops loaded with consumer records. The media has been full of stories lately about compromised consumer privacy from lost or stolen digital records. Not a week goes by, it seems, that there isn't a story about personal data records, particularly credit card records, being lost, stolen or misplaced, whether it be on laptop hard-drives by government agencies or through unprotected firewalls by mobile telecommunications companies.

Data as ad currency. Consumer data is becoming a key battleground in the online advertising wars. Not two days after the AT&T announcement, Google announced that it is paying Adobe a significant fee to embed its search toolbar into Adobe applications. Google, like many other toolbar providers, uses consumer behavior data from its toolbar users to optimize ad deliveries and increase its ad rates and ad revenue. The same is true of Yahoo! and MSN, of course.

Lack of consumer opt-out. Given AT&T's assertion that it owns the browsing data of its customers, it is probably unlikely that consumers will be able to "opt-out" of their data being used by AT&T for ad targeting, or shared by AT&T with their business partners or the government. Since it's a regulated monopoly, many of its customers have little choice but to use its services if they want high-speed Internet connectivity. This differs from consumer data that is captured and used by content companies or search engines as part of their cookie-based ad targeting. Most of those companies are required by the FTC-endorsed Network Advertising Initiative Principles to limit the data that they capture to non-personally identifiable, and to permit consumers to opt-out of their data being used for ad targeting (disclosure: my company operates an ad network that uses consumer browsing behavior data to target advertising).

Whose data is it anyway? It's the consumer's, for sure. And, with the advent of sophisticated targeting, it's also becoming a big part of the currency of digital advertising and marketing. That means that all of the players in the marketplace will make their plays for it as well. As all advertising moves to digital platforms, as is often predicted, the battle will only evolve into full-scale warfare.

Who will win? Consumers, probably. The data is theirs and starts with them. As this data-driven digital marketplace develops, and as consumers become more aware of the value of their data, companies like AT&T and Google will work harder and harder to give consumers value in exchange for the use of their data.

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