On one issue, at least, President Donald Trump has united the country: More than 70 percent of the public – across political parties – oppose a bill he signed that rolls back rules protecting online privacy. Unfortunately, it’s an issue on which Trump and the Republican Congress happen to be mostly right.
The rules in question, which hadn’t yet come into effect, would have required broadband providers to ask customers’ permission before collecting personal data for use in selling ads. That sounds sensible. In reality, it most likely would have raised prices for consumers without doing much to protect privacy. The public’s support for these rules points to a central confusion about the $83 billion market in digital advertising.
To begin with, it’s an error to think that broadband carriers, as gateways to the internet, have a uniquely intrusive view of their customers’ habits. Web companies such as Facebook Inc. often collect much more information about their users, yet the privacy rules didn’t apply to them. Also, the growing use of encryption – such as the HTTPS protocol – means that much of the information flowing through a broadband company’s pipes remains private. Anyway, individually identifiable customer information is broadly protected by law. Broadband carriers aren’t selling personalized browsing histories; they’re selling anonymous packs of data. It’s pretty boring, really.
When asked if they’re concerned about online privacy, consumers almost invariably say yes. But the vast popularity of services that collect their data and use it to sell ads – Google, Facebook and so on – suggests otherwise. Evidently users don’t always understand the trade-offs they’re making. The services are free, the privacy policies are confusing, and the data collection unfolds so smoothly that few people notice it.
The odd result is that the public happily supports this arrangement, while approving of regulation that would probably kill it.
The way to resolve this dilemma is to put a price on personal information, so that customers can choose more deliberately. AT&T Inc. tried this approach starting in 2013, allowing customers to opt out of certain kinds of data collection for $30 a month. For its trouble, the company was ridiculed by activists, condemned by politicians and eventually gave up.
Actually, it was on the right track. Research suggests that people will pay for enhanced privacy protections, provided they trust that they’re getting a good deal. Letting them do so might give broadband companies a new source of revenue while reducing the anxiety of their customers. It could enable more low-income people to get online. Perhaps most important, it would bring some much-needed transparency to the internet economy. And who could be opposed to that? The Editors, Bloomberg