Thursday, August 07, 2008

ISP's partnering with advertisers, what are the issues?

A company called Phorm in alliance with several UK ISP's, has been put under scrutiny by the EU Information Society Commissoner over the legitimacy of tracking web users habits without their consent in order to tailor advertising.

It begs the question; how far are companies allowed to go in monitoring and accumulating user data in order to target users with tailored advertising. Also, to what degree should users be made aware and given choice?

The utilisation of users content and web habits in order to target advertising is nothing new:

1. Google's Gmail service made popular the tailoring of advertising based on customers email content, users must however grant permission for this to take place, by agreeing to the terms of use.

2. The use of third-party cookies by advertisers and associated websites is also nothing new, though legislation in the US, EU and elsewhere requires that users are made aware of what data is being sought and given the option to deny the cookie. This however, may be nothing other than a link to cookie policy on the page of websites. It doesnt necessarily require actively prompting users.

Pressure on ISP's to form partnership with such advertisers has been increasing as competition drives lower prices in the marketplace coupled with ISP's desire for maximum profitability. This is a legitimate economic activity in itself but conflicts with human values outside the economic sphere, values of choice, autonomy and privacy.

The issue here is about giving the consumers the necessary information and the choice of whether to opt into such a service. Not only (in my opinion) should users be alerted with information of which ISP's carry the service, but users should crucially be given a choice with each ISP ;of an opt in or opt out. This is a key point, because as more ISP's form such alliances and in rural areas where ISP's are limited; users may be left with little to no choice of whether to decide. Furthermore, as ISP's will argue that companies such as 'Phorm' subsidise ISP costs, scrutiny by telecom regulators will be crucial to ensure that the 'price difference' in opting out of tailered advertising is a fair reflection on the difference in ISP's profitiability. Again, the issue of choice crops up here as 'cost' may constrain consumer choice: Those of wealthier backgrounds will be able to choose where-as those of lesser financial circumstances may be constrained thus reinforcing stratification. Of course it is worth noting also, that how companies manage and utilise (for what purpose) user data is also of considerable concern here.

Finally, my last point brings us back to services like gmail. Should such companies like Gmail be additionally required to give users the choice of opting in to tailored advertising? as the same issue of choice becomes resonant here! Is this just a question of the need for 'media literacy' skills by adults and an ever younger online population? Ultimately, the issue is about enabling and increasing the capacity for action by individuals, not constraining it! Regulation that seeks to widen choice seems progress to me and this implies a role for governance and regulators as 'silent guardians' of the people! Agree?

For further details, see news article at:

Copyright © 2006-2009 Shane McLoughlin. This article may not be resold or redistributed without prior written permission.

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