Protecting Privacy With Advertising

Market Privacy: Private Firms Develop New Privacy Protecting Products       Back to NCPA Debate Home Page

The privacy resolution includes consumer information as an area that the federal government should significantly increase protection of privacy. One area where consumer information is collected and where there is growing concern is the internet. Internet companies collect information about the people who visit their web site. Some companies have begun aggressively collecting information and combining information collected via the internet with other consumer databases. Consider two ways to protect internet users from advertisers who try to read private Web-browsing data by "harvesting" cookies. Cookies are placed on user's computers by web sites to identify that user when he or she returns. Cookies can store passwords and preferences to make using the site more convenient for customers. But these cookies can also gather personal and internet usage information. One way to try to prevent improper use of cookies would be to pass legislation banning such information gathering. A better approach may be for government to do nothing. When a major Internet marketing firm, DoubleClick, was caught taking advantage of cookies, the objections of privacy advocates coupled with advertising by competitors forced DoubleClick to quickly shape up. The bad publicity drove DoubleClick stock down 40 points. As investors fled, other firms promised to not misuse cookies. The advertisement to the left, placed by Orb Digital, capitalized on the bad publicity generated by a DoubleClick's unexpected use of cookies and plans to match on-line and off-line data profiles. Other competitors piled on, as Wired magazine reported, "to kick the wounded company. ClickHouse.com, another ad network company was among those 'restating' its commitment to privacy protection 'through the non-invasive nature of its advertising systems.'" PrivaSeek quickly advertised its alternate privacy protection tool which enables users to control what information they reveal on-line. These and other firms, along with energetic privacy advocates, are far more likely to shape internet technologies into tools that insure a level of privacy consumers are comfortable with, than will a centralized, top-down approach forced on the industry through additional privacy legislation. For private-sector entrepreneurs, each new privacy problem offers an opportunity for new products and services. Two sources for opposing views on private firms collecting information on consumers are David Brin's The Transparent Society: Will Technology Force us to Choose Between Privacy and Freedom (argues private firms collecting consumer information is not a big problem) and Simpson Garfinkel's Database Nation: The Death of Privacy in the 21st Century (argues it is a big problem).