Congress has overturned a Federal Communication Committee (FCC) rule that required broadband companies to ask customers’ permission before sharing their app usage and online activity data with third parties for profit. President Trump signed the rollback into law. Despite the public outcry from privacy advocates and mainstream media outlets, it is crucial to note that many of the accusations and complaints are misleading.
Some say that loss of privacy is the price we pay for our Internet lives and that Congress sold Americans' privacy to Internet providers. These claims give rise to a false image of internet service providers selling books of customers’ browsing history along with their names, addresses and emails to third parties. A GoFundMe campaign set up by Misha Collins has so far raised $86,590 to purchase Congress’ Internet data. Sadly, their money is going down the drain because this simply is not the way online advertising works.
To begin with, ISPs and Internet companies have pledged to follow the Federal Trade Commission’s (FTC) privacy framework, giving the FTC and FCC the power to hold them accountable. Under these guidelines, broadband and internet companies are not allowed to tie internet or app usage data to sensitive information such as name, address and social society number without permission. In short, opening up online marketplace to ISPs does not mean that our internet privacy is utterly unprotected or online advertising market unregulated. The FCC and FTC retain the authority to monitor and ensure that online advertising business is in full compliance with federal laws and policies.
Secondly, the hard truth is that our digital lives have never been entirely private. As part of the 2015 net-neutrality rule, the FCC took jurisdiction over ISPs while the FTC remained to oversee internet companies. But big internet companies, such as Google, Facebook, Amazon, and Netflix, are not subjected to broadband privacy rules. They have been aggregating customers’ demographics and browsing history and selling them to highest bidders via digital advertising markets for years.
Do you ever wonder why Google and Facebook are free? By using their services, customers consent to letting them gather massive “nonsensitive” data and share with third parties for profit. Google and Facebook are likely to stay as a duopoly in online advertising business even after ISPs can do what they have been doing, because of the behavioral data and personal information which ISPs are unable to get. For instance, Google has been collecting “intent data” from searching history. Facebook probably knows your social network better than you do. Both have better chances of getting cross-device-based data via mobile apps than ISPs.
It may be surprising to learn that trade groups of internet companies asked Congress to abolish broadband privacy rule in January because this rule will “disserve consumers and stifle innovation in online marketplace.” More likely, they are afraid of being targets of complaints or imposed of similar regulations by FTC.
Thirdly, instead of expecting more targeted ads to come their way, consumers will hardly observe any differences in their digital lives. The broadband privacy rule approved by the FCC last October had not yet taken effect before it was officially overturned in April. Accusations claiming this rollback took away existing rights were misinformed.
On the other hand, because the rollback was approved under the Congressional Review Act, the FCC cannot approve “substantially similar” regulations in the future. This new rule guarantees the status quo in the long run. ISPs are treated the same with internet-based companies. The difference is, however, that many large broadband companies, such as Comcast, Verizon, Time Warner/Spectrum and T-Mobile, provide customers the ability to opt out of their targeted advising programs while internet giants do not. Small ISPs are even more incentivized to offer to protect customer network privacy in order to attract business.
By standardizing the level of regulations across the FCC and FTC, the rollback paves the way for future collective efforts to improve user experience and online privacy guidelines on all sides. FCC Chairman Ajit Pai remarked on the importance of cost-benefit analysis at the Hudson Institute on April 5, signaling FCC should take the duty to conduct Regulatory Flexibility Analysis during rulemakings to consider how the FCC’s rules might affect small businesses.
Consumers are better off with a more competitive marketplace, and fact-based, data-driven regulation. The U.S. digital ad market is reaching $83 billion this year and Google alone accounts for 41% of total revenues, followed by Facebook. We may not like the idea of “being tracked”, but it would be better to have multiple companies and providers vying for our business than two internet giants dominating the digital advertising market.
Yao Sun is a contributor to E21.
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