Re: CEI tells the Federal Trade Commission to be wary of regulation

[Declan McCullagh <declan@vorlon.mit.edu>]

---------- Forwarded message ----------
Date: Fri, 25 Apr 1997 22:44:51 -0400
From: Michael Sims <jellicle@inch.com>
To: fight-censorship@vorlon.mit.edu
Subject: Re: CEI tells the Federal Trade Commission to be wary of regulat

I've just read through this thing.  What a load of crap.  The 
libertarian bent shows through, assuming that businesses have a right 
to consumer information and denying that is sacrilege.  I'll just do 
a quick red penning of the thing:


> CEI is a non-profit, non-partisan free-market research
> and advocacy group.

Libertarians aren't a party?

> The confusion surrounding the term privacy leads one
> to conclude that "privacy" is like a Rorschach ink
> blot - different people read different things into it.
>  "Whenever an invasion of privacy is claimed, there
> are usually competing values at stake."   In this
> sense, privacy is not a right, it is a preference.

Of course there are competing values at stake.  Usually, it's your 
"right to make a buck" vs. my "right to be let alone".  I don't think 
corporations have a "right to make a buck".

> Much of what people want in the name of "privacy" is
> that which they could actually achieve through
> traditionally understood conceptions of property
> rights and freedom of contract.  But when "privacy"
> itself is set forth as an amorphous, floating concept,
> it in fact threatens property rights and freedom of
> contract.  It is this substitution of an ill-defined
> "privacy right" for well-defined rights that threatens
> the Internet.

In other words, if consumers have any say in the reselling of their 
names and information, it threatens business's "rights".  Exactly 
what contract did I sign when I posted to alt.beavis.and.butthead and 
received ads about ab rollers and make-money-fast?

> On the other hand, companies cannot impose an agenda
> on private individuals the way the government can.
> When they try to, there are civil and criminal laws
> there to stop them.  Despite rhetoric about the
> "power" of large corporations, all marketers can
> really do is try to persuade people to buy their
> products.  They do this through advertising.

Corporations good, government bad.

> Why is data collection so important for the Internet?
> 
> People have repeatedly demonstrated that they are not
> willing to pay for content on the Internet.
> Advertising Age magazine recently reported that only
> 25% of people polled were willing to pay to subscribe
> to online publications.   Many subscribers to content
> pages freely share their passwords with others.  "If
> Web sites can't figure out how to halt the
> free-for-all, a promising revenue source for on-line
> businesses may be threatened."

Oh no!  Business may lose a percentage of their bottom line! 
Scream! Run away!

Sigh.  I wasn't aware there was a constitutional right to make money 
in a certain fashion.  There IS an [interpreted] constitutional right 
to privacy.

> Therefore, in order to develop, web sites will
> increasingly depend upon advertising for support.

Quite frankly, there's a godawful amount of content out there now, 
being delivered for at a loss, or break even, or a slight profit.

I fail to see the business "right" to turn the net into an 
advertising medium, which so compels this whole statement.

Aren't cookies enough?  geeez.

> At the same time, advertisers are still very hesitant
> about advertising on the Internet.  "Where are the
> marketers?" asked one Advertising Age editorial.   The
> editor of Out magazine's web page, now defunct, was
> quoted as saying, "advertisers aren't clamoring to get
> on the Web - we have to beat them up to get on the
> Web" (emphasis in original).   Anything which makes it
> harder for advertising to work will have direct
> effects on the quality and content of the Internet, a
> very serious harm to Internet users.  In addition, it
> will likely raise the cost to consumers of using the
> Internet.

A flat-out lie.  Advertising pays no costs of my using the 
net, and a very small percentage of the web sites I visit are 
ad-supported.

What they mean to say is, "If you make targetted advertising harder, 
we'll have to rely on less-well-targetted advertising, and businesses 
may make less money off the net."

So?

> Is the issue "privacy," or is it really marketing?
> 
> Much of the rhetoric surrounding the privacy issue
> concerns the purported power of advertising.  There is
> a decades-old strain of thought which declares that
> advertising is coercive and makes people buy what they
> do not want.  This is untrue, as examples from the
> Edsel, to New Coke, even to Nissan (which has a great
> ad campaign but has seen no increase in auto sales)
> show.  Unfortunately, many people do not fully
> recognize the very real benefits consumers derive from
> advertising.

Which corporations support this, uh, "think-tank" again?

There's actually a variety of simple formulas relating how much 
advertising is required to make a movie a hit, for example.  
Publicize an incredibly lousy movie sufficiently, and it will turn a 
profit.  For them to deny that advertising has any power over 
consumers (not people in this corporate-viewpoint paper; only 
consumers) is to deny reality.

> Advertising's role in a market economy is essential,
> and essentially benign.  Advertising lets consumers
> know about price and quality information.  It alerts
> consumers to the existence of new and improved
> products.  It even saves consumers time by helping
> them figure out what they do not want in advance of
> shopping (e.g. a new car's styling is unattractive, or
> it is too expensive).   Curtailing advertising limits
> the availability of consumer information.

That's real funny.  You're right, I'm being done a valuable service 
for my own good when I get spam email for ab rollers.

> FTC Question 2.3: What are the risks, costs and
> benefits of collection, compilation, sale and use
> of personal consumer information in this context?
> 
> Despite plenty of speculation, there has been no
> demonstration of significant actual harm resulting
> from the commercial collection of personal data over
> the Internet. This is not to say that all data posted
> on the Internet are good.  Quite the contrary.  For
> example, the government has made it difficult, if not
> impossible, to live in America today without a social
> security number.  Congress has mandated that all
> states use social security numbers as driver
> identification numbers.  And Departments of Motor
> Vehicles have been rather cavalier about selling the
> data collected, including social security numbers.
> That is why the outcry against Lexis-Nexis, which
> created a database of publicly available government
> information, was misplaced.

Marc Rotenberg already got this one, so I'll forbear.  Not only do 
they have the facts wrong, they turn it into an example of "business 
good, government bad" when it's really an example of "business 
seeking profit runs up against consumers who've had enough".

> The allocation of costs and benefits deriving from
> data collection depends upon whom you ask.

Yeah, and if you ask a pro-business think-tank, their lies will be 
slanted this way.....

>  Again, privacy is a preference, not a universal right.

Unless you count that whole Bill of Rights thing, of course.

They must be referring to other countries here.

> While some may not like the very idea that data are being collected
> about their consumption behavior, others may not care at all. 
> Indeed, some consumers may not mind how much information about them
> is available, if it means they will receive only ads targeted to
> their particular interests.

Like ab rollers.

> "Consumers don't mind advertising and pay attention to it, as long
> as it gives them something of value."

Some people may not mind be gunned down on the street.  Eliminate the 
penalties for murder because some people might like it.

> There is a tension between the notion that all
> interactions on the Internet ought to be private, and
> the fact that people go on to the Internet to
> communicate in public.

I go out on the street to communicate in public too, but that doesn't 
give you the right to phone me 20 times a day selling ab rollers.

> The reality is that going on to the Internet is like walking on a
> public street, with each Web page like a private store.

Sounds good to me.  Does my walking down the street give blanket 
permission for anyone who sees me to call me up and pitch ab rollers?

No?

Does my posting to Usenet give blanket permission for anyone who 
egreps the news disk to mail me and pitch ab rollers?

>  Each Web page has the right to set up its own conditions for entry.
>  Such policies could range from a free-for-all data collection
> spree, to very strict information collection limitations.

Oh, they could.  But without any governmental regulation, I think you 
know which end of the spectrum it will settle at.

Wired's site sends out what, 12 or 15 different cookies?

Those slow-loading sites in the future won't be because of the 
content, it will be because of the tracking they're doing.

> It is important to note that since advertising depends
> upon customer profile information,

No, not really.  "...is made more efficient by...", sure, but 
depends?  No.

> web pages which take extra steps to protect privacy might be
> relatively more expensive, and may have to charge a premium.  If
> one individual prefers more privacy than another, this is a
> reasonable situation.

Pay to avoid ads!

> It behooves Web pages to clearly define the terms of entry.  As for
> chat rooms and newsgroups, their entire purpose is for people to
> communicate with each other.  Therefore, people should not be
> surprised when third parties collect information which they have
> already placed in the public realm.

Oh, surprised, no.  Annoyed when their "collections" endanger the 
usability of my email, and cost me substantial time, yes.

> There are some very serious problems with the notion that consumers
> somehow "own" information about themselves which they have already
> released publicly, or through a contract with a company.

Consumers have no rights.  Businesses have rights.  Remember this.

>  Away from the virtual world, people have repeatedly shown
> willingness to give up their "valuable" personal data in return for
> such things as rebates or coupons.

Where's my coupon for posting to Usenet?

>  From product reply questionnaires to supermarket shopper clubs,
> people give out information all the time, often
  ^^^^^^

Substitute "idiots".  I never fill out any of that crap.

> automatically.  Even when it comes to the sale of magazine
> subscriber lists, many people know about it and often take
> advantage of deals offered by other magazines and by marketers of
> certain products.

Sure, buddy.  Like my subscription to Scientific American, which has 
resulted in my being sent direct mail for tons of shit designed to 
appeal to 65-year-old scientists.

> Some say that consumers ought to be reimbursed for this sale of
> names.  But value is subjective, and, in a market economy, a good
> offered for sale is only worth what someone else is willing to pay
> for it. Companies pay for the names because it saves them the time
> and expense that it would take to collect the publicly available
> information themselves. Arbitrarily assigning a price to names,
> rather than having it settled by negotiation through the market,
> assumes that everyone agrees upon the value of a name. As discussed
> above, this is not so.  Artificially raising the price of a good
> (i.e. a name) through regulation would surely decrease demand for
> it.  That outcome might please many privacy advocates, but it would
> hurt consumers in unseen ways, by limiting the availability and
> circulation of consumer information.

Translation: it would dent advertising costs and put them on the 
advertiser instead of the receiver of junk ads.  Consumer bad, 
business good: we don't like this idea.  We like the costs being on 
the consumer.

> If you release information about yourself, then that information
> becomes part of the public realm. For example, suppose you place an
> engagement announcement in a local newspaper.  You do not "own"
> that information.  That is, other parties can pick it up and use it
> for, say, creating mailing lists of newlyweds or brides-to-be. "The
> power to control information about you is the power to control the
> speech of others."

Nice platitude.  I would think libertarian property rights would hold 
sway here, but I guess they're conflicting with "business good".

> Even when it comes to implicit contracts - the selling of magazine
> lists, for example - there is no reason why it is incumbent upon
> the magazine seller to obtain an affirmation from every subscriber
> before selling their names. Rather, sensitive consumers ought to
> pay attention to the fine print of their contracts.

There's no part of the Sci Am subscription form which says "by 
subscribing, we will sell your name around the world to junk 
mailers."  Believe me, I've looked.

> They can decline to contract in the first place, or establish a set
> of  acceptable conditions, such as requesting that their names be
> removed from mailing lists.

A farce.  You and I know that business will require disclosure of 
personal info as a prerequisite for doing business if it lies within 
their scope.  I think Radio Shack was a particularly egregious 
example of this, requesting names, addresses and phone numbers even 
for cash purposes.  I've told them to fuck off on more than one 
occasion.  Imagine if your phone number was scribed on the outside of 
your body, as your email address is on this posting...

> Keeping names off of lists is a preference and not a right.

Businesses have rights!  Consumers have none.

> Consumers who do not like this practice have no right to impose
> their preferences on everyone.

Businesses have rights!  Consumers have none.

>  What goes for the real world should apply to the virtual world.

Okay, ASK me for my info, just like you have to in the real world.  
Sounds fair to me.

> The risks of this data collection by companies are overstated.

I've seen more than one account disabled by excess junk email.  
Think it's a pain now?  Just wait.

> The one exception is when collected information falls into the
> hands of the government. For example, an ice-cream shop culled
> names of eighteen-year-olds from the store's birthday club and sold
> the list to the selective service.   For these customers, going
> into an ice-cream shop mean induction in the army.

Government bad, business good.

> The costs and benefits of data collection are different for every
> consumer.   Regulation would only institutionalize a set of
> preferences, rather than uphold rights.  It might be that companies
> ought to be more explicit about their information collection
> policies.  However, those companies which do take extra steps in
> this regard frequently tout it.  In short, those consumers most
> concerned about data collection already have one way of satisfying
> that preference, without resorting to government intervention.

Which way was that?  Choosing only marketers who say they won't 
resell information?  What if they lie?

> FTC Question 2.16: How widespread is the practice of sending
> unsolicited e-mail?  Are privacy or other consumer interests
> implicated by this practice?  What are the sources of e-mail
> addresses used for this purpose?
> 
> Unsolicited e-mail is very similar to junk mail in the context of
> "privacy."  Many people find it annoying, especially since junk
> e-mail shifts the cost from the sender to the recipient, who pays
> in time and money. However, enough people like it and take
> advantage of it that the practice continues.

No, the cost of sending the advertisement in the first place is low 
enough that the practice continues.  Typical response to a junk 
emailing is about 20% of receivers will reply with hate, the majority 
will ignore it, and fewer than .1% will respond favorably.

This CEI statement is grossly misinformed or simply lying.

> E-mail marketers often harvest names through data mining -
> collecting e-mail addresses from newsgroup posts and chat rooms. It
> is clear that many consumers do not like this, but it is not clear
> why this practice should be made illegal, as opposed to being
> simply irritating.

It's an irritation that government has the power to stop; and

Nothing short of government action will stop it; and

Government action will not cause any collateral damage.

Seems like a perfect case for government action to me.


> As previously noted, people who venture out into those chat rooms
> and newsgroups are going out into public. E-mail put out into these
> areas is public property,

Au contraire.  Saying such a thing does not make it so.  Public 
property?  No.

> much as an engagement announcement would be. Therefore, someone
> collecting lists of names and sending out junk e-mails is acting
> perfectly legitimately.  There is no way for a data collector (or
> even another participant) to know in advance who would like to hear
> about something or not.

It's safe to assume the majority do not.  That's true with 100% 
certainty.  Yet this paper attempts to say the consumer is being done 
a service.

> The combination of what is wanted and what is unwanted is different
> for everyone.

I don't want anything that is completely unsolicited trying to 
sell me stuff.  This is true for 99% of the human race.

> Many people object to the costs of paying for unwanted e-mail (e.g.
> charges per e-mail received, line charges incurred while using the
> e-mail function).  That is perfectly understandable.  But if you do
> not wish to be put on a list, the responsibility is yours to avoid
> it.

It's not companies' responsibility to not call you at 3AM - it's your 
responsiblity to not have the phone on the hook!

> Fortunately, there are already  options available.  Most of
> the major Internet providers - AOL, Prodigy, CompuServe - already
> have banned junk mailings.   This provision of what some see as a
> valuable service is perfectly legitimate as well.  In addition, AOL
> also permits people who participate in chat rooms to use up to five
> false names.  Along with the ease of finding anonymizers to surf
> the Web, "going incognito" has never been so easy to do.

They know as well as anyone that the "default" is to reveal plenty of 
information, and few users will stray from that.

They also know that neither AOL nor Prodigy nor Compuserve have 
"banned" junk emailings.  They are lying, yet again.  What the online 
services have done is take action against a certain junk emailer who 
was reducing the usefulness of their email systems with the 
volume of junk mail inflicted.

> As the Washington Post aptly noted, "Psychologically, the more
> interesting question is why folks who long since gave up the
> attempt to stop mass telemarketing or ordinary
> delivered-to-the-door junk mail find it so much more immediately
> threatening to receive mail that can be deleted at the touch of a
> button."

Mass telemarketing is far from illegal.  It is regulated to avoid the 
extreme abuses which occur with 100% certainty when businesses 
see a chance to make money.  As should junk emailing.

> FTC Question 2.18: What costs does unsolicited commercial e-mail
> impose on consumers or others?  Are there available means of
> avoiding or limiting such costs?  If so, what are they?
> 
> The wording of the question suggests that the FTC believes that the
> primary cost of unsolicited e-mail is "privacy."

Translation: we would like to avoid a discussion of the very real 
dollar costs imposed upon unsuspecting email recipients.  The wording 
of the question suggests no such thing, but that's what we'd like to 
talk about.

>  Once again, "privacy" is a preference.

Forgot that Fourth Amendment again, eh?

> Therefore, junk e-mail is a cost only to those who personally
> object to data collection.  It might be useful to look at this
> situation in a different way.

Unless you count such mundanities as time and dollars as "costs".  
Funny how these pro-business types are great at accounting usually, 
but forget all that when it comes to making these statements.

> In addition, clamping down on data collection will hurt smaller
> companies and non-profits, who might find this data collection
> useful in finding new customers or members.  Well-known
> non-profits, for example, receive a great deal of publicity and
> exposure in the general media; how many other, smaller groups would
> like to find people interested in their work via the Internet?

Wave the non-profit flag to disguise the HUGE profit-seeking behemoth 
out there.  Great.  As if I'd ever help aa non-profit who spammed me.

> One of the biggest objections to data collection is its awesome
> speed.  But this is not a sufficient basis for regulation; it is an
> extension of objections to data collection in general.

Actually, it is.  The abuses become significantly greater and 
therefore more of a concern to government.

> Use of data collection technology makes information cheaper and
> more available to a variety of groups, from non-profits to
> associations dedicated to one or another hobbies or interests.

As if that would account for .00000001% of the use.

> As Esther Dyson put it, "The goal is a market in privacy practices.
>  That will result in constantly improving standards rather than
> rigid ones set by law, and in decentralized, speedy enforcement"
> (emphasis in original). 

You know how this "market" will go?  Businesses willget together, say 
"Hey, there's no point fighting over this, let's just standardize on 
full consumer disclosure.  It will help all of us."  and that will be 
it, no more market.


-- Michael Sims