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The Real Impact of Do Not Track

It Will Consolidate Dominance of Microsoft, Yahoo, Facebook, Google, Amazon and eBay.

By Published on . 10

Many in the U.S. and Europe are frustrated by the dominant market position held by big U.S.-based players like Facebook, Google, Microsoft, Yahoo, Amazon, eBay and others. But nobody is talking about what Do Not Track legislation or Microsoft's Internet Explorer 10 web browser, which sets DNT "on" by default, means for this situation.

There's a giant elephant in the room that defies explanation. If DNT is implemented the way that Microsoft, some regulators and hard-core privacy advocates want, the big winners are -- wait for it -- the biggest American internet companies with their huge first-party opt-in databases.

Everyone else in the industry better hold on, since the playing field is about to make a huge tilt toward the big guys. My guess is this has been Microsoft's plan all along.

This can't really be about privacy
See, DNT will not have any impact whatsoever on the amount or kind of data already being collected by first parties online. These first parties, (Amazon, eBay, Facebook, Google, Yahoo, etc.) will maintain their relationships with consumers no matter what the setting of an individual's browser because that individual derives some service or benefits from them. Indeed, Microsoft will remain the gateway to the web for the 47%-odd Americans that access it through Internet Explorer.

All these first-party retailers, social networks and media companies collect tracking information -- as well as personally identifiable information -- and they all aggregate this and all transact it online. This is not a value judgment. It's a fact.

None of the privacy advocates or regulators are objecting to this -- at least none I have heard from. At the same time, none of the privacy advocates or regulators are can present credible examples of anyone being harmed by the collection of non-personally identifiable information, the kind of data that is routinely collected to enable online interest-based (behavioral) advertising.

Sort of ironic, isn't it?

Big data. Really big data
But this gets worse. When data is concentrated in the hands of a few, the companies owning that data will be able to charge even higher prices to marketers for their data, since of course, it will be more exclusive. Disclosure here: many of these companies are our clients. But that just means I know what I'm talking about. And I know they adhere to best practices, too.

Having conversations about this issue in the EU, where everyone is trying to comply with the EU Privacy Directive, is not so entertaining. While as an American, I'm proud of our country's innovation, a small number of big companies shouldn't have total control over this market. Throughout the EU, fatigue over U.S. technological hegemony is palpable. Microsoft paints its decision, in part, as a way to bring a new norm acceptable to the Europeans, but let me tell you Europe is way more worried about U.S. companies' dominance than they are about anonymous behavioral tracking.

In some ways European regulators get it in ways that privacy advocates and industry pundits here in the U.S. seem not to. Consumers who are downloading free tools like our Ghostery in record numbers continue to demonstrate that transparency and education works. DNT and shutting off visibility does not.

DNT means many publishers could go out of business, and web advertising will look much more like it's 1997 all over again for IE10 users. But DNT also means that your personal information just got a lot more valuable. Those transacting data online will continue to do so, and perhaps will get richer. This could go down as the mother of all unintended consequences. And nobody seems to realize it even exists.

ABOUT THE AUTHOR
Scott Meyer is CEO of Evidon, a startup he founded as entrepreneur in residence at Warburg Pincus LLC, the global private equity firm that is supporting the company. From 2005-2008, he was president and CEO of About.com, a part of The New York Times Company.
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