The fine print

Policymakers have a tough job trying to keep up with the advances made possible by technology. An area they’ve been active in lately is the online advertising industry.  It’s booming. Digital-ad revenues in America in the first half of the year reached a record $32.7billion according to the latest figures from the Interactive Advertising Bureau. 

The Economist recent reported that the Federal Communications Commission (FCC) announced a new rule to protect personal privacy online. Internet-service providers, such as AT&T and Comcast, must now ask consumers for permission if they want to gather and share data deemed to be sensitive, including financial information and users’ browsing history.

Marketers and digital-ad firms insist that they already police themselves well. They consider data on browsing and apps, in particular, to be essential for targeted advertising. Under the FCC’s rule consumers can “opt in” to share this information, but firms fear that many will not.

There is a limit to the FCC’s order, which perversely makes it only more controversial. It will restrict data collection by internet providers, but have little impact on broader online tracking. Notably, it does not affect so-called “edge-providers” such as Google and Facebook, which have operated under a separate privacy framework from another agency, the Federal Trade Commission (FTC).

The order further tilts the advantage to Google and Facebook while the consumer has less clarity than before because now limits for gathering data depend on the identity of the gatherer.  The question now is whether regulators will look at this mishmash and apply stricter limits to Google and Facebook, too. 

I believe it’s time for policymakers and regulators to adopt an approach used by scenario planners for years – the futures wheel, in order to identify 2nd, 3rd, and 4th order implications of proposed rules before they’re enacted.  It will make policymaking more complex in the short run, but would highlight areas key leverage points that would ensure the policy or rule matches the intent.

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