DATA COLLECTION IN THE INTERNET ECONOMY

-- By JaimeSalas - 14 Dec 2012

Context

For my surprise, in a matter of weeks I have found myself reading several articles in the front page of the New York Times about electronic online real time bidding, online consumer stratifying, virtual vaults to secure personal data, mobile app transparency, weblining and other issues concerning how data collection in the internet economy era is “the” purpose of several main players of this industry (data is the new oil as some people say). Even though the focus of such articles is mostly concerned about the business models behind data collection, (actually many of them are in the business section of the newspaper) at some point these and other similar articles are examples of how privacy concerns are increasingly taking part of traditional media and how people is becoming aware of the risks of living in the so-called “surveillance economy”. In this context, in the following paragraphs I will try to explain some of such risks and the challenges that we will be facing in the short term as Internet users.

Consequences of online profiling

Ever wonder why the same ad for a trip to Mexico or a Bar Exam prep course keeps popping up on your screen? Nowadays the answer is not longer because you might have searched that in Google, but most commonly the answer is real time bidding. Real time bidding is an electronic trading system that sells ad space on web pages people visit at the same time they are visiting them. In broad terms, real time bidding works because some companies have been building comprehensive profiles of individual Internet users based on what we browse and buy online (in a massive way –it is said to exist more than 200 million profiles only in the United States) that are later on sold in seconds to bidders that are looking to identify good prospects of clients to be targeted with specific ads tailored to catch their attention. Advocates of this practice hold that consumers benefit from it by receiving ads and offers specifically relevant to them. It is said that it’s just the 21st century version of the old practice of sending catalogues to specific clients’ homes. The problem is that it is not completely true.

Besides privacy concerns, online profiling has an inherent risk of being a powerful tool to discriminate people. Internet users are labeled under a given criterion, stratified under some sort of caste system and therefore subject to be unfairly excluded from receiving valuable information that in certain cases can even affect financial, educational or health opportunities. For instance, is it fair to exclude certain consumer from getting access to discounts based on their perceived spending power or to bombard “profiles” that seems to be in economical distress with high-interest payday loans? In this sense, by affecting the ads we receive, the news we read or the result of our Google searches, online profiling is somehow shaping parallel online realities suitable for each alleged type of Internet user. As Eli Pariser says, “Personalization can lead you down a road to a kind of informational determinism in which what you’ve clicked on in the past determines what you see next — a Web history you’re doomed to repeat. You can get stuck in a static, ever-narrowing version of yourself — an endless you-loop.”

The worst part of the story is that the vast majority of Internet users have little control of their profiles and the average Internet user is leaving a huge digital footprint each time he or she uses the Internet without much care about who is collecting such information and for what purposes. That lack of awareness has helped the creation of massive databases that in turn has led to a transformation about the nature of Internet users which now are considered mainly as products waiting to be sold to the highest bidder. In absence of regulation about tracking or data collection, market responses have not being helpful and they seem to do not realize the basic fact that information should belong to users and not to the ones that are collecting it. For instance, companies like reputation.com are building massive databases with consumer information with the purpose of then request the holders of such information a fee in exchange of letting them select what information can be shared and to whom. The thing is why people would be willing to pay for the privacy of their own information?

First Aid Measures

If in most developed countries consumer reporting agencies that compile credit reports are at least required to show people the records they have about them, it is time then to extend such principle as well to the industry of online data collection. Self-regulation has proved to be insufficient and some basic mandatory rules are missing. First of all any given solution needs to recognize that personal data about online behavior belongs to the consumer and not to the collector; secondly, having to pay a fee in order to have access to purge some personal information doesn’t seem the right way to solve the problem; third, among many other measures mandatory disclosure rules about web sites tracking functions and do-not-track options are required. At the end it’s about having the right to know who is tracking us online, who is looking at our behavior as we go from site to site and what conclusion are they drawing from that.

What we have today is a decentralized system of personal data vaults that can be accessed by all kind of retailers, advertisers and even governmental agencies to serve their own purposes without much consideration to the holder of such information. In absence of a minimum level of enforceable regulation that level the playing field in favor of Internet users, the entire framework of privacy provisions that are recognized in most jurisdictions is meant to be just dead letter (just to name one of many examples, Google’s user data request function is a serious threat to the whole system of judicial warrants that are required in most countries to allow government agencies to have access to certain sensitive data). It remains to be seen, however, if there will be political support to engage congressmen around the world in passing legislation in an issue where they have so much in stake. At the end they will be choosing between unrestricted access to potential voters’ information and voters’ privacy.