Reference no: EM131153381

BEHAVIORAL TARGETING: YOUR PRIVACY IS THE TARGET

Ever get the feeling somebody is trailing you on the Web, watching your every click?

Do you wonder why you start seeing display ads and pop-ups just after you’ve been searching the Web for a car, a dress, or cosmetic product? Well, you’re right: your behavior is being tracked, and you are being targeted on the Web as you move from site to site in order to expose you to certain “targeted” ads. So how common is online behavioral tracking? In a path-breaking series of articles in the Wall Street Journal in 2011, researchers examined the tracking files on 50 of the most popular U.S. Web sites. What they found revealed a widespread surveillance system. On the 50 sites, they discovered 3,180 tracking files installed on visitor computers. Only one site, Wikipedia, had no tracking files. Some popular sites such as Dictionary.com, MSN, and Comcast installed more than 100 tracking files! Two-thirds of the tracking files came from 131 companies whose primary business is identifying and tracking Internet users to create consumer profiles that can be sold to advertising firms looking for specific types of customers. The biggest trackers were Google, Microsoft, and Quantcast, all of whom are in the business of selling ads to advertising firms and marketers. Google, given its dominance in search, knows more about you than your mother does. Another third of the tracking files came from database firms that gather and bundle the information and then sell it to marketers. Many of the tracking tools gather incredibly personal information such as age, gender, race, income, marital status, health concerns (health topics you search on), TV shows and movies viewed, magazines and newspapers read, and books purchased.

A follow-up study in 2012 found that online tracking had doubled since 2010, with over 300 firms placing tracking files on the top 50 Web sites. A $31 billion dollar online ad industry is driving this intense data collection. Facebook uses its Like button to follow users around the Web even if you log off. Its social networking site is one giant tracking system that remembers what you like, what your friends like, and whatever you reveal on your Wall. While tracking firms claim the information they gather is anonymous, this is true in name only. Scholars have shown that with just a few pieces of information, such as age, gender, zip code, and marital status, specific individuals can be easily identified. Moreover, tracking firms combine their online data with data they purchase from offline firms who track retail store purchases of virtually all Americans. Here, personal names and other identifiers are used.

The growth in the power, reach, and scope of behavioral targeting has drawn the attention of privacy groups, members of Congress, and the Federal Trade Commission (FTC). Currently, there are no laws or regulations in the United States that prevent firms from installing tracking files on your computer or using that information in any way they please, but this situation is beginning to change. There is now considerable legislative and government interest in protecting the privacy of consumers, driven in part by public fear of the loss of privacy and the lack of transparency in the world of Web tracking.

In April 2011, Senators John Kerry and John McCain proposed the Commercial Privacy Bill of Rights Act of 2011. The legislation would allow consumers, on a site-by-site basis, to demand Web sites stop tracking them and selling their information online. In July 2012, eight members of Congress launched an investigation of data brokers who collect both online and offline data on consumers.  In March 2012, the FTC released a final report based on its work in the previous two years. The report describes industry best practices for protecting the privacy of Americans and focuses on these five areas: Do Not Track, mobile privacy, data brokers, large platform providers (advertising networks, operating systems, browsers, and social media companies), and the development of self-regulatory codes. The report called for implementation of an easy to-use, persistent, and effective Do Not Track system; improved disclosures for use of mobile data; easier accessibility for people to see the files about themselves compiled by data brokers; development of a central Web site where data brokers identify themselves; development of a privacy policy by large platform providers to regulate comprehensive tracking across the Internet; and enforcement of self-regulatory rules to ensure firms adhere to industry codes of conduct. The report warned that, unless the industry developed a Do Not Track button for Web browsers by the end of the year, and developed policies for reining in rampant online tracking without user consent by data brokers, it would seek legislation to force these requirements on the industry.

The FTC report is supported by the White House, which issued its own framework for protecting online privacy in February 2012. One provision of this framework is the development of a one-click, one-touch process by which users can tell Internet companies whether they want their online activities tracked. In July, Microsoft announced that its Internet Explorer 10 would ship with a Do Not Track option already selected, requiring users to opt out if they want to be tracked. Facing fines, congressional investigations, and public embarrassment over their privacy-invading behaviors, with the potential loss of some business and credibility, the major players in the e-commerce industry in the United States are beginning to change some of their policies regarding the treatment of consumer data.

Questions:

1. Why is behavioral tracking such an important ethical dilemma today?

2. What would happen if there were no behavioral tracking on the Internet?

3. Research the Google owned “DoubleClick”. What is its purpose? How does it affect consumers?

4. What are your thoughts on these practices? Explain and give reasoning (through research) to back up your answers.