US Senate hearing draws a blank on online advertising
After its prime billing as the day NebuAd, Microsoft and Google would get a severe grilling from the US Senate, this week’s two hour hearing on online privacy proved a rather damp squib.
In stark contrast to the UK where the information Commissioner has told behavioural advertising technology company, Phorm, its network can only operate if consumers opt-in, no such legal insistence has yet been placed on NebuAd in America.
In fact, a Washington Post report on the two hour Senate hearing was punctuated by committee members admitting to not understanding the technology. Senator Thomas Carper admitted that after the hearing he would have to buy a new dictionary, whilst an ISP executive being questioned respectfully pointed out he did not understand the rambling question he was being asked, Senator Bill Nelson, who had posed it, had to admit he did not know what he was asking either.
Senator Byron Dorgan, who led the hearing, summed it up as showing “how little we understand” about internet advertising.
Many arguments were raised against the need for legislation on the basis that companies are not storing personally identifiable information and that to make them seek a consumer opt-in would damage profitability unnecessarily. Senator Jim De Mint, for example, suggested the online industry was managing its own house well and even voluntary guidelines would be “a solution looking for a problem”.
So, after all the hype as the day behavioural targeting network NebuAd would be given a dressing down, which caused at least one ISP to put its partnership with the company on ice until after the hearing, the day passed off very peacefully for the industry executives.
NebuAd works in a very similar fashion to Phorm, which has caused controversy in the UK. ISP subscribers are never personally identified, they are given a number, but their viewing habits allow the tracking technology to judge what they are interested in. Whilst the web pages that led the network to know a consumer is interested in photography and mortgages are never stored, the information that they are possibly looking for a new camera and a better deal on a remortgage is. This leads to better targeted adverts, the companies claim, and, most importantly, higher priced advertising of which the participating ISPs are given a cut.
The legislative response either side of the Atlantic to the systems has been very different. Whilst there has been much sabre rattling from privacy groups and the occasional politician in Washington, no action has been taken to further protect consumer rights.
In the UK there have been similar protests and campaigners are expected to picket BT’s AGM next week to show opposition to its planned use of Phorm, as well as raise allegations with the police that BT has trialled the technology in the past without user permission.
However, in contrast to America, there has been firm regulatory action in the UK to guide the roll out of behavioural targeting advertising technology. The Information Commissioner published a report this Spring which insisted that any systems tracking a consumer’s use of the web could only be offered on an opt-in basis.
Hence Phorm is launching under the banner of WebWise, offering an anti-phishing service for free which is accompanied by a consumer being anonymised as a random number, rather than their identity, and then their interests categorised as they surf the web.
BT has vowed to carry on with its planned roll out of Phorm “over the coming weeks” despite the planned protests.
