Commentary

Doing Away With Online Privacy Rules: Short-Term Gain, But What About The Long-Term?

Before the first week of January had passed, before CES was over and two whole weeks before the new Administration is sworn in, the advertising industry has gone straight for the FCC’s jugular. It demanded the repeal of the rulings around broadband consumer privacy.

In full anticipation of the imminent ideological and operational overhaul of the FCC — some would say course-correction, others evisceration — just about every major industry body representing the interests of advertisers, agencies, digital publishers and direct marketers banded together to petition for the reconsideration of the “unnecessary restrictions on the digital economy.”

Bearing in mind who President-Elect Trump has chosen to lead the FCC and the overall tone of the Republican majority now calling the shots, it is an all-but-sure-fire certainty the industry will have its wishes granted and the ruling will be reversed.  

The timing could even provide the new leadership with an easy and quick win to demonstrate that the FCC really is under new management.

After all, Net Neutrality – another major target of the incoming leadership – will likely take a little longer to unravel.

There is little doubt that lifting the recently imposed restrictions on what can be done with consumer data gathered online will benefit the companies that have based their growth and very existence on capturing and utilizing online behavioral data, matching it with third party data sets, selling it on, targeting advertising and so on.

For the time being, the ability to continue with business as usual will benefit the digital economy in all the conventional ways we have come to understand and appreciate.

However, issues around privacy, data security and data ownership are complex, ever-changing and shaped by intangibles as much as by nice linear factors, like technology and regulation.

While it undoubtedly benefits companies to be able to have a free – or at least mostly free – hand in how they collect, access and leverage consumer data, consumers themselves have a much more ambivalent and sometimes contradictory position on the matter.

The vast majority of consumers have little to no idea just what data is captured or how it is captured as they make use of the Web. They don’t have a clear grasp of how that data is used or who by and to what end -  beyond the more obvious applications.

They do know that its somehow all part of how they gain access to the services and sites they enjoy. They understand this is somehow part of the quid pro quo that makes it possible to avoid paying for things. But beyond that, things are vague at best and resented at worst.

In research I’ve conducted on this issue in the past, consumers consistently expressed the view they feel coerced into accepting the terms and conditions of access if they want to participate in the 21st century. They see no choice and little attempt to explain anything beyond the impenetrable legal language they have to say they’ve read — which of course they haven’t.

As consumers continue to become increasingly data savvy and more aware of the value of “my data” within the burgeoning data-sphere, the importance of trust and demonstrable transparency on the part of brands, publishers and service providers will become increasingly paramount.

At the same time, cases of perceived abuses of trust or data breaches while not the norm, will become increasingly resented by an online population that can only continue to be more aware of its personal value as it becomes better informed.

This not only suggests the need for ever-greater security and enhanced customer relations online, it also means that the segment of the population not wholly comfortable with the kind of data use the industry requires will represent an opportunity for a different kind of business.

In the same way that consumer dislike of advertising online has given rise to once-unthinkable ad blockers, the prospect of “data-blockers” – while currently inconceivable – could ultimately become available to those who want at least some degree of simple control over the extent to which their data is accessed and leveraged in the marketplace.

The promise of the inclusion of consumers themselves as active participants in the data economy is already something that companies are addressing. While it seems largely contrary to how things are currently done, it wouldn’t be the most disruptive thing that digital technology and the internet has brought us.

Besides, the law of unintended consequences is always there waiting to surprise us. In this case, rolling back those nasty privacy regulations could unleash a different and unanticipated set of challenges farther down the line even harder to get to grips with than any road blocks the FCC could devise.

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