"The privacy legislation has been a bit on the back burner, and
I think this may help focus more attention on it and perhaps put it
back on the front burner," said Linda Goldstein, a partner and
chair of the advertising, marketing and media division at Manatt,
Phelps and Phillips. "This could have a significant impact on
consumer attitudes which ultimately could impact consumers'
willingness to share information with brands."
Following a Guardian report revealing that Verizon shared call records
on a daily basis with the National Security Administration, several
of the largest digital media and advertising firms including
Google, Facebook, AOL, Apple, Microsoft and Yahoo
were implicated in reports suggesting they provided consumer
interaction data to the NSA and Federal Bureau of Investigation;
the firms denied they've been pumping data to the government as
part of the alleged program.
If the general public connects the dots between corporate data
collection and government access to that data, it could spur
stricter laws for advertisers. "I think it may put more pressure on
the ad industry in terms of this whole behavioral targeting issue,"
said Thomas Smedinghoff, a partner at Edwards Wildman Palmer who
specializes in privacy and information security law. "I certainly
don't think it's going to help the ad industry."
Focus on advertising?
Of course, many in the ad industry hope this government data-gate
serves as a foil to commercial data practices, resulting in less
focus on how marketers gather and use consumer information.
"Politically, the current debate around the Prism program and other
government practices certainly takes the focus off of more accepted
commercial data practices, and it would seem antithetical to the
administration's current national security practices for them to
push data collection restrictions onto leading internet companies,"
said Mike Zaneis, SVP and general counsel of the digital ad
industry's largest trade group, the Interactive Advertising
But the reason government has access to so much data in the
first place, in many cases, is because corporations collect it. "A
lot of what the government knows about us they know because of
companies, so you have to have some confidence that you have some
control over the data they collect on you," said Justin Brookman,
director of the Project on Consumer Privacy for the Center for
Democracy and Technology. Mr. Brookman argued that controls for how
corporations collect, transfer and store data are necessary because
"it's hard to fix government access."
Senator Jay Rockefeller, a Democrat, re-submitted his
Do-Not-Track Online Act (originally proposed in 2011) in February.
The bill calls on the Federal Trade Commission to oversee
development of a DNT mechanism, and was co-sponsored by Connecticut
Democratic Senator Richard Blumenthal. The Prism scandal could
thrust the bill into the spotlight, or prompt additional
"It certainly tees it up," said Anthony DiResta, a partner at
law firm Winston and Strawn who focuses on advertising and privacy
issues. "It really presents a clash of two very important concepts:
one being the governmental interest in exploring leads that could
impact national security, yet on the other hand this very important
notion we have in privacy of the right to be left alone."
Reports of the NSA program fueled a firestorm among people
concerned about excessive government surveillance and corporate
cooperation, as well as speculation regarding fallout for the firms
involved in the form of future consumer exodus. If the uproar
persists and spreads among everyday consumers, it could push
privacy legislation towards the top of the pile.
"I think it's going to heighten consumer awareness of the magnitude
of data that can be collected," said Ms. Goldstein. "And that
could, I think, give some impetus to additional privacy
Organizations including the ACLU have
launched petitions to protest the NSA's surveillance program,
however there doesn't appear to be any widespread activist movement
bubbling yet. Indeed, rather than spawning a big push for
comprehensive privacy legislation, the scandal could be perceived
more as a political problem for the Obama administration if some
lawmakers have their way.
Senator Rand Paul, a Republican from Kentucky, aims to
challenge the Prism program at the Supreme Court level. Some
Democrats have also expressed disapproval.
"When Americans call their friends and family, whom they call,
when they call, and where they call from is private information. We
believe the large-scale collection of this information by the
government has a very significant impact on Americans' privacy,
whether senior government officials recognize that fact or not,"
said Democratic Senators Mark Udall of Colorado and Ron Wyden of
Oregon in a joint
statement last week.
"I think it's already becoming politicized as yet another Obama
administration issue and some of the attention may be diverted to
that…and that may take some of the attention away from the
core privacy issues," said Ms. Goldstein.