Facebook, Google, Yahoo Fight "Do Not Track" Privacy Measures

There's a growing social and legal momentum behind the "do not track" initiative to protect online privacy, but now Facebook and Google are opposing the legislation, hinting that job losses and profit cuts could be the result. Are there slightly dirty tricks afoot?

Californian legislators are slowly pushing ahead with a Do Not Track law introduced by Senator Alan Lowenthal, which would force Net companies to allow consumers to easily and effectively opt out of personal data being collected online--violators could face civil legal action. Lowenthal has noted that in his opinion legislation "is consistent with California's long history of championing privacy issues."

But now Facebook, Google, Yahoo and other companies have written to Lowenthal to state their specific objections. "The measure would negatively affect consumers who have come to expect rich content and free services through the Internet" is one of their counter-arguments, along with an allegation that a no-track law would make the public "more vulnerable to security threats." Also, forcing the law through would "prove costly to the state" and also "cumbersome for the Attorney General to figure out how to regulate under the bill and to enforce the law."

Essentially the letter's signatories say the proposed law would deplete user experience of online services (and potentially stifle innovation), put them at risk from Net criminals in ill-determined ways (an allegation that could scare users), be expensive to enforce, and potentially spawn extra work and maybe legal cases at a governmental level. Oh, and as an extra point the firms note that Net-related businesses are the fastest growing source of jobs in California. Putting this at risk, they argue, would damage the state's potential employment figures. That's a broad list of reasons--each of which, by itself, could really affect the current model for how websites make money from users, or force lawmakers to reconsider. If they're true.

The key part of this to consider are the words "business model." Google and Facebook pretty much own the online ads business between them. A key part of this is highly targeted advertising based on key data on individual subscribers--acquired through systems like cookies, historical archives of web searches, or which sites users visit and log in to via Facebook Connect. The Do Not Track bill threatens this income, as many users could press a button and disconnect Google and Facebook (and other firms like Microsoft) from potential revenue streams. Apple is also an indirect signatory on the objections letter, possibly due to its interest in iAds--its new high-tech ad platform on iOS devices--and other future ad-related plans the firm has, leveraging off increasing use of its iPhones and iPads.

Would a Do Not Track button really put users at risk of security breaches, though? Surely a database of user profiled behaviors is actually more risky--as the Sony hack is ably demonstrating right now. How about the TV business--it doesn't track all the individual viewers, but it manages to bring in billions in advertising revenues by profiling ads in other ways. It's possible to make a case using these, and other, arguments that a Do Not Track law may actually encourage innovation in the online ad space.

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