As summer transitions to fall and beach season shifts to election season, there is no question change is in the air across America.
When it comes to public policy, sensible change can promote increased innovation and progress; while ill-advised change can lead to disastrous outcomes for the economy, consumers, and the nation at-large.
One example of the latter can be seen at the Federal Communication Commission (FCC) and the agency’s recently proposed broadband privacy regulations.
Earlier this year, in an effort to help reign in unwarranted data collection and halt shady online tracking practices, FCC Chairman Tom Wheeler opened up a controversial rulemaking expanding the Commission’s jurisdiction over privacy practices of Internet Service Providers like Comcast and AT&T. Sold under the guise of protecting consumers, however, the FCC’s rules were crafted to solely monitor ISPs while leaving the rest of the Internet companies who base their entire business model on tracking and using “big data” without any rules. As written, rather than protecting consumers, the rules make the status quo worse by promoting less competition and innovation in online advertising.
No one can deny that consumers should have the power to protect their data while they surf the web – but these rules fail to supply that power. And worse, they only apply it to part of the Internet while leaving the Internet’s biggest privacy offenders, companies like Facebook and Google, in the wild west, free to take consumers’ data and use it as they please.
From Amazon and Etsy to WhatsApp and Pokémon Go, the Internet is rampant with tracking cookies, ID markers, data aggregators and malvertising. Further, studies indicate that mobile apps and device manufacturers are the ones who most frequently share customer data with third-parties as a way to increase profits.
As I wrote earlier this year, given the complexity of the online ecosystem, the FCC’s ISP-only approach misses the mark when it comes to actually providing comprehensive protection. Simply put, privacy protections must work for everyone using any device, using any browser and on any platform. By establishing piecemeal standards, the rules do nothing but complicate consumer expectations about how their data will be protected online.
Adding insult to injury, due to broadband reclassification under Title II regulations last year, the FCC’s proposed rules effectively strip online privacy authority away from the Federal Trade Commission (FTC), the leading agency that has blazed the trail on privacy for nearly three decades.
One major point of contention between the two agencies is centered on how the FCC’s actions turn a blind eye to the FTC’s successful framework of consumer choice based upon the data sensitivity. Last month at the Technology Policy Institute’s 2016 Aspen Forum, FTC Chairwoman Edith Ramirez expressed deep concern with the direction claiming, “There is risk of negative consequences if you have divergence…If you have basic privacy laws across the board, you then wouldn’t have a discrepancy between… companies that are outside of the FCC’s jurisdiction.”
As the FCC often writes in many of its reports and rulemakings, when it comes to pressing issues, the best strategy is to listen to the experts. It is time the FCC take its own advice and listen to the FTC on this issue.
While our increasingly connected society fosters new opportunities for economic growth and entrepreneurship, it also propagates the use and potential misuse of consumer information. Given both the risks of data collection and benefits of personalized advertising, there is an important regulatory balance needed to encourage innovation while protecting consumers. Any new rules the FCC creates need regulatory parity, so consumers’ perception regarding an online privacy cop-on-the-beat match reality.
Published in Forbes on September 14, 2016.