Obama FTC Spells Trouble: Part II

A comment left by privacy advocate Jeff Chester on a piece that appeared here criticizing the direction the Federal Trade Commission is taking under President Barack Obama perfectly illustrates how utterly bereft of substance the online privacy movement’s arguments are.

In the piece with which Chester took issue, I pointed out that with the appointment of Jon Leibowitz to head the FTC along with two other rumored appointments, it looks as if the privacy movement is about to gain serious traction at the agency: very bad news for online marketers and advertisers.

I also pointed out that Chester’s applauding Leibowitz’s appointment should scare the heck out of marketers. As evidence of why, I explained that—among other activities—Chester has been trying to ridiculously broaden the definition of what constitutes personally identifiable information.

The reason he and other privacy advocates want to broaden the definition of personally identifiable information is so they can get industry-choking regulations passed governing what those with an IQ above room temperature would call anonymous advertising profiles.

If privacy advocates can get placing cookies on computers to track clickstreams and repeat Web site visits defined as collecting personally identifiable information, they can get it regulated.

I contend that if there’s no name and address, there’s no personally identifiable information.

In Chester’s rebuttal last week, he mostly cited an FTC document, which claimed that one day it may be possible to identify individuals based on their IP addresses. How this can be accomplished when multiple members of a household use the same computer is anyone’s guess.

But this is the way it always goes with privacy advocates: They’re the Internet’s Chicken Littles. Their arguments are 100% based on what they claim could be, never on actual harm. Why? Because there hasn’t been a single case of actual harm done to anyone as the result of monitoring browsing behavior to make online marketing and advertising more effective.

Not one.

Ever.

Privacy advocates would call this column anti-consumer. I would call privacy advocates anti-consumer. Consumers don’t need privacy advocates’ protection from marketers and advertisers and they certainly don’t need privacy advocates making it harder for merchants to reach consumers with offers of products and services they’re more likely to want or need.

And not only are privacy advocates campaigning on a non-problem, their entire argument is based on a fatally flawed premise: that consumers own the information surrounding commercial transactions they make. This is patent nonsense.

Pop quiz: If one person sells another a car and both write details of the transaction on pieces of paper, who owns the information surrounding the transaction?

Why yes. Both of them.

Now logically, if both the seller and buyer own the information surrounding a single transaction, then if one person sells 10 cars to 10 different people, the seller owns the information surrounding all 10 transactions, as well. Suddenly, we have the makings of a marketing database.

When a value-for-value transaction takes place between two private entities, both own the information surrounding that transaction.

Moreover, marketers collect information simply to make as much cash as possible by better serving the needs of customers and prospects. To call stifling this process “consumer protection” is truly Orwellian.

Marketers control neither the military nor the police. As a result, the worst they can do is embarrass people or creep them out by getting a little too personal. [Remember: This is a privacy discussion, not a data-security discussion.] Marketers who get in the habit of embarrassing customers or creeping them out lose them.

There is a financial incentive to behave. And no, not all marketers succeed at behaving, but fulfilling privacy advocates’ wishes—compulsory opt-in for cookie tracking technology, and implementing a national online-advertising do-not-track list—will protect no one from any harm of any sort while hindering online advertising’s ability to work to its potential.

The last thing the FTC should be doing right now is hamstringing an industry for no justifiable reason.

Meanwhile, I owe readers ran explanation. Not surprisingly, some Obama supporters were upset that I criticized his FTC picks last week. One said I barely concealed my contempt for Democrats.

Here’s the deal: I try and keep politics out of this column because the subject generally has no place here—except for when it affects marketers and advertisers.

Changes at the FTC directly affect marketers and advertisers.

As for barely concealing my contempt for Democrats, I am for the most part a libertarian. I believe in the power of the free market. I am pro-marketing and advertising. [Imagine that: A pro-marketing and advertising editor of a marketing-and-advertising newsletter.] I strongly dislike needless government. I can’t think of a time I have not had contempt for Congress no matter who controlled it. I generally have contempt for politicians, period.

I also believe since it is likely I won’t have much good to say about the FTC for the foreseeable future, readers have a right to know the political prism through which I view issues. This is an opinion-based newsletter, after all. I hope readers who disagree will be able to join the debate in the comments section following articles.