Why Would Microsoft Lob a Grenade Into Online Advertising?

IE 10's Do Not Track Feature Could Destroy Years of Work and Invite Legislation

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Industry needs to do a better job of meaningful, rigorous self-regulation or it will certainly invite legislation by Congress and a more regulatory approach by our Commission. Put simply, this could be the last clear chance to show that self-regulation can – and will – effectively protect consumers' privacy in a dynamic online marketplace. - FTC Chairman John Liebowitz

Chairman Leibowitz threw down this gauntlet to the online advertising industry just over three years ago. This led to the development of our industry's Self-Regulatory Principles for Online Behavioral Advertising in July 2009. The principles became the foundation for our industry's self-regulatory program, which – like the principles themselves – is all about enabling transparency for consumers and well-intentioned businesses online.

Three years later, the program is working. In fact, it's working so well that Chairman Leibowitz told a press conference that it had made "extraordinary strides" on March 26. Transparency is winning. Research tells us that consumers overwhelmingly favor brands that participate in it and enable more transparency. Bad actors are being weeded out through enforcement by the Better Business Bureau, which has named a dozen companies and publicly told them to change, while identifying others and pulling them in line more privately.

So, why did Microsoft throw a grenade into the self-regulatory program last Thursday, when their Internet Explorer team announced via blog post that they intended to launch IE 10 with Do Not Track (DNT) as the default setting?

Ironically, the industry (including Microsoft's own ad network), government, and privacy advocates agreed to extend this concept to browser controls in February at the White House. This agreement overcame one of the major weak points of Do Not Track: It only works when the companies who collect the data agree to honor the DNT signal. (Interestingly, Microsoft's ad network does not.) With this move, Microsoft has isolated itself from the rest of the industry and endangered the coalition behind the DAA. There may be other reasons in Redmond that are not obvious, but regardless, this move adds confusion at a time when neither consumers nor the industry can afford it.

The decision by the IE10 team to embed Do Not Track as the default setting in IE10 demonstrates that they think they know what is best for all of us. But, as we've asserted since the inception of the self-regulatory program, privacy controls are like nutrition labels on food: Consumers need to know what's there, but the decision of what to eat remains theirs alone. It's about how you explain the choice to the consumer that matters most, not how you make the choice for them.

When a consumer decides not to be tracked, this has wide ranging implications for hundreds of companies in the online economy, in addition to unintended consequences for the consumer. This is precisely why the decision to be (or not be) tracked needs to be made by the consumer, not by a corporation. This view is shared by essentially every voice in this issue—from privacy advocates to the White House, browser-makers to privacy vendors like us—all agreed that DNT headers should be recognized but should allow consumers to opt out by default.

There's no shortage of opinions about what consumers know and don't know about tracking. But, like with nutrition labeling, the goal needs to give them the best tools to make their own decisions, not make the decisions for them. Consumers have great control over tracking already. Evidon's free Ghostery browser extension blocks tracking by more than 950 companies around the world. It doesn't rely on any recognition of a DNT header. Rather, you install it, and off you go. More than eight million people have installed Ghostery. The consumers who want to control how they are tracked are taking the steps themselves. Concurrently, what we've found as the program has grown is that by protecting themselves and empowering consumers, businesses are actually able to build their brands and improve results online – thanks to the kind of transparency the program was designed to provide.

In other words, the US industry self-regulatory program has not only worked to keep us from regulation. It's also helping businesses grow while allaying consumers' concerns.

There's a message there, if anyone in Redmond wants to hear it. Consumers think the web is theirs to see more clearly. They need the control to make their own decisions, and technology that is going to be effective out of the gate. Microsoft's IE10 is a significant step away, not toward, that principle.

This is why everyone who has worked so hard for the past three years to keep our industry from federal regulation or punitive legislation remains so confused and frustrated by Microsoft's decision.

(Disclosure: Microsoft is an Evidon client)

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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