Table of Contents
- Executive Summary
- Introduction
- Behavioral Advertising, Which Encourages Extensive Data Collection, Is One of the Most Dominant Online Business Models
- The Behavioral Advertising Business Model Can Harm Individuals
- Legislation Could Promote Privacy-Protective Business Models
- Concerns Remain over the Potential to Harm Innovation through Overly-Prescriptive Legislation
- It Is Unclear Whether Preventing Online Companies from Charging a Higher Price to Protect Privacy Is Beneficial Overall
- Conclusion
Introduction
The internet has flourished alongside the behavioral advertising business model, in which businesses collect extensive data about internet users and leverage that data to sell targeted ads. In exchange, these businesses offer users a “free” service that users pay for with their data, rather than with money. While the business model has fostered the free flow of information and created opportunities for online companies to increase efficiency and profit, the perils of behavioral advertising are becoming more obvious, and the consequences more commonplace.
The current push for federal privacy legislation can potentially disrupt existing business models and incentivize the creation of new models that better protect users’ privacy. In an effort to protect individual privacy in the aftermath of the Facebook/Cambridge Analytica scandal, policymakers are now discussing how to hold companies accountable for privacy intrusions. One aspect of the ongoing debate considers legislation that could effectively outlaw certain revenue sources, including banning behavioral advertising or precluding companies from charging users for exercising their right to privacy.
This report builds on an event held at New America’s Open Technology Institute on July 16, 2019, during which we asked speakers, among other things, “What online business models should Congress deem off-limits?” Nathalie Maréchal, senior research analyst at Ranking Digital Rights, delivered opening remarks, while Natasha Duarte, policy analyst at the Center for Democracy & Technology, moderated the panel consisting of Megan Gray, general counsel and policy advocate at DuckDuckGo; Keir Lamont, policy counsel at Computer & Communications Industry Association; Gabrielle Rejouis, law fellow at the Georgetown Center on Privacy and Technology; and Lee Tien, senior staff attorney and Adams Chair for Internet Rights at the Electronic Frontier Foundation. The speakers discussed various aspects of this question, including the prevalence of behavioral advertising, the harms that this business model can cause, how legislation could promote privacy-protective business models, concerns related to overly-prescriptive privacy legislation, and the pros and cons of pay-for-privacy regimes.